In the spirit of sharing what I learned at this year’s South by Southwest Interactive (#SXSWi) Festival in Austin I’ve posted my notes from a few of the interesting sessions that I was able to attend. I live posted these over the course of the event to allow folks to share in the learning that were unable to attend. The following notes represents the final set from my time in Austin. Please pardon any typos–my personal notes tend to have them…
You can see my full schedule from SXSWi here (http://sxsw.lanyrd.com/jenngustetic ). Also, some great people to follow to go back and read their live coverage are @digiphile @bevusa @amandare @gagnier and @dominiccampbell @wdeggers
Lastly, my favorite hashtags from the event were #HowManyRungs, #amhealth, #crowdsxsw and #nikebetterworld. For all the tweets, check out #sxswi.
Website with the open source technologies: http://agora.is/
In the last year years in Iceland there has been a ton of uncertainty within the citizenry. That uncertainty is rooted in economics, values and identity. This is largely because of their recent corruption issues. But they’ve learned that innovation can thrive during uncertainty. Citizens have actively participated in several new collaborative experiments for moving the country forward.
Their banking and financial system collapsed in October 2008 which caused a huge identity crisis. The collapse of the banks was followed by mass demonstrations by the population. The Government decided not to bail out the banks so the country was hit quite hard. Citizens started to question a lot of concepts, like the current leadership. The feeling was that they were led into this by leadership. The Ministry of Ideas was established as a grassroots organization to combat this identity crisis. They wanted to learn from the successes of open source projects (like linux)…
In November 2009, they brought together an assembly to define the vision for the nation. They brought together 1500 citizens for a visioning session organized by volunteers using the method of the “wisdom of the crowds”. Used several methods: agile planning, scrum facilitations, DOT voting, focus groups, wisdom of the crowds and brainstorming to co-create a vision for the nation. They set up a structure to capture all the information (9 areas X 9 groups X 9 members X 2). The planning started as a group of 9 and ended as 500 volunteers and 1500 participants, including 300 change leaders (CEOs, government, etc…). That’s A LOT of information to try to make productive… so they heavily relied on technology to facilitate the process. A start up from Iceland got involved that is used to dealing with a lot of text. Using this tech, ideas were in near real time translated from voice, to text, to a visualization of ideas. That was very impactful for people. This included text and meta-data where text came from (participants, gender, age, etc…). They analyzed this data to form groups into topic areas like education at the event itself. The event ended in a listing of values for the country generated by the participants.
Organizers were interested if these values aligned with the priorities of current leaders. So they went and scraped parliament sites and started comparing their language to the vision of the nation. Fundamental question: Which leaders aligned with the people? Found almost no alignment. Then they compared visions to political party. These comparisons helped to identify leaders that were in synch with the vision for the nation—and there was one big outlier that aligned. Most others did not.
All technologies used in this collaborative session were made available in open source. The biggest outcome of the assembly was honestly. As a testament to its effectiveness, as Iceland prepares to rewrite its constitution it plans to use a similar crowdsourcing techniques to engage the citizens in that process.
Virtual communities like Eve Online (http://bit.ly/zG1wd ) also provide learning for the political process.
How Many Rungs?: Social Change & the Engagement Ladder, Saturday 9:30AM (#HowManyRungs)
This session focused on examples about how to take online communities and create offline activism. It was heavily example based. Some examples follow.
Dosomething.org: This is an online youth community where the only rules are “no money, no car, no adults”. They are trying to mobilize offline action with online networks. Partners are critical to this effort: 85% corporate funded Their outreach strategy includes TV, radio, mobile, entertainment, school-based, aggressive PR campaign (using celebs), website and social media and email.
One program, teens for jeans, raised 542,000 pairs of jeans in 4 weeks. And then distributed them to youth homeless shelters. That’s more than 1 pair per homeless teen that year in America.
Role of the Media: The media also can play a role in stimulating engagement through the following activities: Activation (events, experience, trama, religion)à motivation (emotion, faith, connection, intelligence) selection (direct giving, “well-lit”, sustaining, results driven) àengagement (ease of entry, experiential, technology, social)
Groupon and Social Engagement: Groupon is a spinoff of “the point”, a social engagement website: http://www.thepoint.com/ “Long, long ago (2008), Groupon was born out of a group action and fundraising platform called The Point. As the Groupon community grew, our collective consumer power helped people get great deals and discover fun ways to experience their cities. After a desert vision quest where we invoked our ancestral spirits, we are repossessed with The Point’s powers. Newly inspired, we’ve devised a way to connect Groupon users with their communities in a different way—with G-Team. Groupon followers who want to do good, have fun, and make a real impact can now join forces through G-Team campaigns. G-Team campaigns range from ridiculous flashmobs to fundraisers that benefit local community organizations. Every G-Team campaign connects you with enough people to achieve something awesome that you couldn’t have done alone.” ( http://www.groupon.com/g-team)
Start Some Good: This is a new startup to build games people can play. It connects donors with do-gooders and deals with a lot of the financial complexities associated with donating. http://startsomegood.com/
Future 15 Panels, 11am-1pm Saturday
Nick Skytland, from NASA (@skytland) talked in a rapid fire session about NASA’s citizen participate efforts. He quickly laid out 9 ways to participate with NASA. If you’re a _____, here’s a way to participate:
- Rocket scientist—Centennial challenges. Millions of dollars up for grabs (www.centennialchallenges.nasa.gov)
- Inventor—Participate in online innovation platforms (www.nasa.gov/ntl and www.innocentive.com )
- Robot Engineer—Google lunar X-prize. Land a robot on the moon. (www.googlelunarxprize.org)
- Hacker—Hackathons “Random Hacks of Kindness”. Next Events June 4-5. (http://www.rhok.org/)
- Community Manager—Check out Fragile Oasis, which is launching a major facelift now. Submit projects focused on making the earth a better place to live. Winning projects get a photo taken from space. (http://www.fragileoasis.org/)
- Astronomer—Galaxy Zoo. Contribute to understanding of universe by clarifying galaxies by shape. (http://www.galaxyzoo.org/ )
- Marine Biologist—ZooInverse. Teaming with NOAA to focus on underwater exploration. (www.zooinverse.org)
- Public Relations—Tweetups. Next tweetup is at april 19th launch. (www.nasa.gov/tweetup)
- Explorer—Commercial space travel. Check out virgin galactic. Can fly commercially to space for $200k. (www.virgingalactic.com )
Tim Bonnemann (@intellitics) hosted a session discussing how to facilitate effective public participation. In addition to giving great tips about how to design public participation efforts, he gave several examples of online participation efforts: www.youchosebayarea.org, www.expertnet.wikispaces.com , and www.erplan.parks.vic.gov.au.
Also, check out http://ParticipateDB.com which aggregates tools and examples of public participation. Follow them at @ParticipateDB. Find the slides from his presentation here: http://www.intellitics.com/blog/2011/03/12/sxsw-future-15-designing-successful-online-consultations/.
Mobile Health in Africa: What Can We Learn?, Saturday 12:30PM (#amhealth)
Speaker’s twitter handles: @textandshout @jaspaldesign @joshnesbit @PattyMechael
Mobile Phone Donation Program: www.hopephones.org
This session focused on how mobile and technology has been furthering the health provision movement in Africa. In general the panelists are moving forward with technology deployments to address mobile health problems quickly. If you keep looking at what technology will be available 6 months from now, you’ll just come up with more reasons to wait. They are acting now with what’s available, not waiting.
A lot of these technologies rely on mobile. So HopePhones puts your old phone at the front lines of global health. This program enables the reuse of phones to support mobile health programs abroad. There is currently a 1-2% replacement rates for phones they are fielding annually. People in Africa are in general taking really good care of the phones distributed through @hopephones.
Even though mobile is huge, it still doesn’t reach everyone. Even in the US, smart phone penetration is only 40% so building tech only for smart phones leaves a large group of people out. To enable the utility of mobile devises 150 mobile payments applications were rolled out last year. It’s a huge growth area that will enable mobile health in the future. However, these innovations have not yet reached the global health market yet.
There are many people on multiple sets of drugs in Africa with various methods to properly take them. It gets very confusing for people and thus they are often not finishing their therapy/treatment. Leveraging mobile for use alerts is hugely useful. For example, “ X out TB”, a program out of the MIT Media Lab, changed behaviors in treatment using mobile at the local level for $2 worth of medications: http://mobileactive.org/x-out-tb-addressing-tb-noncompliance-mobile-phones. This program was born out of the MIT IDEAS Competition: http://web.mit.edu/mitpsc/resources/ideas-competition/index.html
Mobile networks and the power of those networks to transfer data are growing exponentially. Lack of data standards and interoperability makes it very difficult to aggregate data that’s being captured at the local level to help with surveillance and policy making. There is no health policy regime in Africa.
To continue to follow conversation about mobile health after #sxswi, a great hastag is #mhealth
Radical Openness: Growing TED by Giving it Away, 9:30AM Sunday
Speaker’s twitter handle: @junecohen
June Cohen discussed TED’s “radical openness philosophy”. Their evolution included opening up content, conferences, and then finally their code. They announced that they were releasing their API at SXSW.
On the content side, TED used to be private, exclusive and elite. What happened at TED stayed at TED, but they thought the talks deserved a broader audience. As talks moved online, the conferences started selling out even faster. Which is not what they wanted—they hoped that opening it up would relieve the pressure on attendance and spread ideas. But the effect was to radically increase their branding. The result? 900 talks viewed 400M times worldwide.
The principles that talks strive to achieve include: reach people everywhere (geographically and in terms of media habits); embrace open models (talks released under creative commons license—half viewed under TED.com, 20% are downloads, >10% embeddable players, ~10% youtube, etc… all of these platforms are necessary for spreading the talks); design for a (very) small screen; start strong; and evoke contagious emotions.
According to June, the use of embeddable player is the simple most important feature in having a video spread.
Data-Driven Government: Improving the Citizen Experience, 9:30AM Sunday
Speaker’s twitter handles: @TimOReilly, @MattLira & @AneeshChopra
ExpertNet Wiki: http://expertnet.wikispaces.com/Getting+Started
Aneesh Chopra, Tim O’Reilly and Matt Lira talk about how data can help drive government decision making. They immediately used expertnet as an example for an enabling tool for this.
Chopra described how 3-4 high priority performance goals (HPPG) were published in the budget for each agency this year. The idea behind expertnet was to try to make performance against these HPPGs more transparent. Performance.gov plays a large part in making this transparent but there is also a need for a collaborations space. He sees expertnet as a place to have a series of structured conversations about new and innovative ideas to improve the HPPGs for each agency; it’s meant to be used by federal advisory committees.
The rubber meets the road in rulemaking. Bills only set up rulemakings that need to happen—and it takes years to do rulemakings. Notices of proposed rulemaking allow for public discussion—but the right people are rarely following these conversations. Aneesh talks about getting involved in the NPRM stage to solicit proper feedback. Right now we are in an experimentation phase in thinking through how to best engage the public in identifying WHAT needs to be regulated, what the terms of that are (bills) and what the implementation approach is (rules).
How are we going to expedite problem solving in the public sector? Chopra: (1) We created an alternative procurement path in the America COMPETES act (results and outcomes based prizes) (2) We are creating developer ecosystems that will allow for rapid development of products (For example, HHS has created an ecosystem where there are prizes available for developing apps on health insurance exchanges. But this isn’t just about apps. A billion dollar business could emerge out of these application developments since it’s an entire new industry.) (3)We are developing standards for third party applications to increase inoperability.
The Science of Influence, 11AM Sunday
Speaker’s twitter handles: @danzarrella @marshallk @mich8elwu @ramyatkj
Analytical tool to ID influencers: http://www.needlebase.com/
Klout, the social influence tool: http://klout.com/
This panel spoke about how to identify influencers and what influence on the web really means.
They started with some myth busting: (1) to the panelists, it’s more important to have quantity than quality to extend the life an idea/link. (2) also a myth exists in the area of social proof: that confidence drives reach. Meaning, if other people are retweeting, more will retweet. Not actually true according to data from some of the panelists (3) those people with more followers tend to respond less. Users with a lot of followers aren’t typically that conversational.
What is influence? It’s not a popularity contest, or about followers. It’s about the ability to drive action. You measure your success, understand your network, and know who to connect to as you understand your influence. Social action is a large part of measuring influence: sharing, conversations, messages, and lists all help to give insight into who influences action. The network effect is also incredibly important. Who are the people in a network driving action and do they have the same content preferences? With respect to business, the desired action is to move people from awareness, to interest, to desire, to purchase. The hypothesis is that you can do this through influence. Influence is changing people’s mind and thus their actions. People you trust are those that you have the strongest relationships with. Relationships drive trust and thus influence. Offline relationships drive online influence.
Also, influence has to do with both the influencer and the target. Influencer needs six factors to be able to effectively influence a target: domain credibility, bandwidth (translate knowledge into tweets and blogs, etc), content relevant, timing, channel alignment, and target confidence. Influence is largely driven by credible content creation; the same goes in the academic world through citations. Traditional forms of influence (publications, etc) can now be more effectively measured as they move online. Many people are becoming influential BECAUSE they’re online. If you’re influential offline, you can grow that influence online.
How can you identify influencers? High bandwidth users and credible users on a particular channel (twitter, facebook, etc…) will help identify a list of potential influencers on that channel for a particular domain area.
Needle base, an online service, makes it easy to scrap content off websites and visualize that data. Helps to ID folks from twitter, by location, that share a common expertise/influence to help targeting people to reach out to. (http://www.needlebase.com/) . Needlebase can also scrape data from twitter lists.
Influence in “action focused” at this time—it’s not making a judgment on whether it’s positive or negative. “All press is good press” rule still applies. Even negative events and “baiting” behavior will have the effect of increasing influence as its currently defined.
What’s the role of “Klout”? According to the panel, it lets you measure influence across the population and see how people are using the market space. Klout is opinion in mathematical form. So should we put our faith in an algorithm? We do for google search…
How Social Networking Is Changing Advocacy, 12:30 PM Sunday
This core conversation was about how non-profits and advocacy groups are using social media and what they can do to use it more effectively.
Why social media works for non-profits: (1) It taps into people’s natural passion and desire to share “stuff” (2) It leverages the trusted peer-to-peer promotional network and enthusiasm right out of the box. (Non-profits enjoy this benefit—it’s much harder for commercial, for-profit institutions. People are more open to hear from their “friends” than “organizations”. They are also more driven by passion and trust in their network on these issues.) (3) It allows organizations to bring their messages forward—it’s hard to get people to come to you; it’s easier to go to them where they’re at and them drive them back to our sites (4) It’s natural fit for the demographic most likely to participate in advocacy anyway.
Advocacy is far more decentralized today—not as simple as sending out messages to a network of donors in a controlled way. Social media as an advocacy model did not exist 5 years ago and is shifting the expectations of our constituents. You risk losing relevance if you’re not out there having a bi-directional conversation. It’s not a one-way information provision/communication model anymore. Constituents expect conversations and engagement. Newsletters used to be enough—not anymore. It used to be acceptable to provide organization-centric information (pictures and updates on fundraising events, letters from the editor, etc…) not constituent-centric (stories from constituents, content designed for and individual’s consumption habits, etc…).
In advocacy, there are “bear people” and “wolf people”. It’s hard to get people to become passionate about the other. Next challenge is to segment content to constituents based on the type of person they are.
Crowdsourcing: Innovation and/or Exploitation?, 5PM, Sunday (#crowdsxsw)
Speaker’s twitter handles: @mecredis @zittrain @l2k @ladamic
This session focused on whether crowdsourcing enables innovation or exploitation. Panels came from crowdsourcing companies mechanical turk and crowdflower, as well as skeptics of crowdsourcing.
Examples of institutions supporting crowdsourcing efforts for co-creation:
- Crowdflower: According to panelist, this is “not a sweatshop”. They are very transparent with how their tasks are completed, even though the tasks might be completed for low wages. (http://crowdflower.com/ )
- Gerson Lehrman Group (GLG): GLG is intelligently connecting institutions and expertise and is the global marketplace for expertise. Since 1998, its technology-enabled platform for collaboration and consultation has helped the world’s leading institutions find, engage, and manage experts across a broad range of industries and disciplines. (http://www.glgroup.com/)
- Sama Source: This is non profit that gives jobs, not aid. (http://www.samasource.org/)
One of the panelists, Dr. Zittrain focused his portion of the session on whether crowdsourcing is a threat or a menace. In general, crowdsroucing can provide huge amounts of work. For example, Wikipedia has required about 100M hours of human labor to construct and maintain. The question is whether or not this work model respects labor or not.
Examples of the various levels of work and payment associated with crowdsourcing include:
- Xprize—Provides huge prize purses for solving a very specific, and specialized problem. People get paid, but for very specific knowledge and expertise. (www.xprize.org)
- Liveops—People at their houses will take calls for businesses and act as outsourced call centers. Workers start at “level one” with very simple call center tasks/scripts. Like a game, if you pass a level, you can get to slightly harder/more sophisticated calls. Workers get paid a descent wage and have a large degree of flexibility in their work. (http://www.liveops.com/?gclid=COmxlfbHzqcCFYa7KgodC0M5Dw )
- Innocentive—For $20,000 in prize money, the solver hands over all IP to the seeker. They only retain value from initial work, not unknown future applications. (http://www2.innocentive.com/)
- Mechanical Turk— Mechanical turk is an amazon webservice named after 18th century machine that pretended to play chess. This machine was early artificial intelligence. Mechanical turk hires people for small wages to do small amounts of work. You can participate as a requester or worker on mechanical turk. Dr. Zittrain believes that the wages are too low to have people make a life out of it. So are people doing it for the money? People participate in this for many different reasons (money, insomnia, etc…) (https://www.mturk.com/mturk/welcome)
- Chore wars—Earn nothing for doing chores other than points, like a game. (http://www.chorewars.com/)
- ESP Game—Simple concept: people amass points for assigning labels to pictures. There is a slight gaming aspect since they “play” someone else while doing this. To date, 4.1 million labels have been tagged to pictures with 23,000 players. Many people play over 20 hours a week and they simply amass points for labeling pictures. NO OTHER INCENTIVE. (http://www.gwap.com/gwap/gamesPreview/espgame/)
- Duolingo—With this crowdsourcing effort, you learn a language as you translate phrases for them. You translate phrases as you’re learning. Incentive is to learn a language. (http://duolingo.com/)
- Internet Eyes—This company puts CCTV footage online and has participants monitor the footage. You get 5 alerts per month and there’s a bounty if the alert leads to something. (http://interneteyes.co.uk/)
- Photo recognition— “The Iranian regime has demonstrated that it can be remarkably tech-savvy. It created a crowdsourcing website – www.gerdab.ir – used to identify protesters and dissidents.” (http://hub.witness.org/en/blog/digital-media-and-irans-green-movement-look-back-cameran-ashraf ) These photo recognition efforts can be used for a variety of purposes including identifying criminals (like pot smokers) and political dissidents.
It becomes difficult to not exploit children in this schema—should a child be identifying a political dissident? Are there child labor law issues here? What about regular labor laws? How do you ensure people are not being exploited with low paying, and in some cases, NO paying, tasks in order to support these crowdsourcing efforts?
Better Innovation, Design and Sustainability via Open Source, 11AM Monday (#nikebetterworld)
Speaker’s twitter handles: @andrew_zolli & @hjones_nike
Related links: Nike better world website (http://www.nikebetterworld.com/)
Session description: “The need has never been greater than it is today for action to be taken on separating consumption from the use of natural resources if we are all to thrive in a future sustainable economy. Nike believes that design, innovation and a commitment to open source data and collaboration will help fast track the work needed to architect a sustainable roadmap. This session will explore the internal and external pressures that are creating a platform for Nike to start a conversation with the design and development community around the value and application of intellectual property and data to help find solutions to some of the most intractable sustainability problems.”
We have a fundamentally broken production system that does not support sustainability. For example, it takes nearly 7500L of water to make ONE t-shirt! Nike recognized they needed system change–not just to change their own business model–to become more sustainable. They thought about how they could use data they were sitting on for bigger social change. Collaboration with other vendors was usually a big corporate no-no. Specifically, location of factories was a hard data set to release. But this triggered many brands releasing factory data to increase working conditions together, since often many brands manufacture at the same plants.
So what’s Nike doing?
(1) The Green Exchange: All patents are created and released under creative commons. “At the GreenXchange, [the] strategy is simple, to accelerate and scale sustainability-innovation through sharing intellectual property assets. [They] do this with an eye toward: reducing the costs of technology transfer, driving the creation of new innovations and business models, and finally, accelerating industry convergence. The resulting innovations create more efficient, more profitable, and more meaningful business opportunities or models.
To accomplish these goals, the GreenXchange provides a standardized patent license structure, whereby asset holders can control what levels and to whom their intellectual assets are available. Subsequently, those in search of new technologies have easy and direct access for licensing assets that meets their needs and obtaining direct contact with the asset holder. The license structure that makes this all happen provides a simple protocol of three options; research non-exempt, standard, and standard-PLUS– that define approved usage in a straightforward way, mitigating the traditionally expensive and drawn-out intellectual property negotiations.” (http://www.greenxchange.cc/)
(2) Considered Design: This is a method for how to design products with a lower environmental impact. Starting this summer all tennis shoes will be designed that way. Nike created an index to aid in this design method and made IP behind that index public. (http://www.nike.com/nikeos/p/gamechangers/en_US/considered)
(3) Nike is partnering with Code for America to develop more sustainable innovation models for production.
Some other examples of efforts are also addressing the issues in sustainable innovation:
Water for People is a non-profit focusing on providing clean drinking water to people all over the world (http://www.waterforpeople.org/)
Global Pulse: The UN is making data available to protect the vulnerable and encourage innovation (http://bit.ly/bPOIfq)
RepRap: This is a cool, open source production project that distributes low cost manufacturing, empowering more people (http://bit.ly/aZLa5q)
Apps, APIs & Syndication: Creativity in the Post-Website Era, 12:30PM, Monday
Speaker’s twitter handle: @orenmichels
There are three basic parts of any app: (1) Data: digital assets (2) Logic: things that happen (search, etc…) and (3) Presentation: where things end up (website, mobile, etc…).
People typically want to interact with data and logic in more than one way (game consoles, TVs, etc…) but those devises typically don’t have access to the data and logic unless you can remove the locks and provide them access. To do this, you have to create rules for sharing between different devises/presentation layers—otherwise known as the API. So at a very basic level, releasing the API allows presentations on multiple different channels.
There are two basic types of brands: passion (we identify ourselves with these, like Apple. Most of us have 3-5 brands we would consider passion brands.) and functional. People are more likely to download a passion app.
The basics of creativity and marketing are the same in the post web-site era: Go where your customers are, do something useful, be creative, do something new—we just have new tools now.
The Thank You Economy, 3:30PM, Monday
Speaker’s twitter handle: @garyvee
Gary: “If content is king, context is God”. In Gary’s opinion, Interaction changes relationships, changing context, and increasing the value of the content.
It’s not about if you’re on mashable or if Dave Mcclure or Sacca have invested in you. It’s all about the end user. Startups and entrepreneurs aren’t always thinking about the end user—sometimes the “big guys” are better at that. So Gary asks two questions before investing in a company: (1) Do you really have a grasp for the problem you’re trying to solve? (2) Do you care about the end user?
Gary advised the audience to hit an emotional center with customers—don’t just push coupons on them as a thank you. Take the thank you out of the context out of the way you normally do business with the customer. For example, Gary’s wine company sent a new customer a signed jersey that meant something to that customer based on their knowledge of their customer’s other likes. They hit the emotional center to create loyalty. To Gary, this will be the differentiator in this new phase of business. Bottom line: execute as-well and out-care other companies and you WILL beat them.
“It’s the free shipping rule”—throw in free shipping and sales increase a ton. The “thank yous” like the jersey, are the “free shipping” promotions of today. Thus people are going to start “battling on the care front”.
He believes we’re living in the beginning of the humanization of business. He also believes we’re humanizing brands—they act like people by “speaking” through twitter, etc… There is a need to go back to the place where social interaction in business means something (like the neighborhood relationship with the butcher). Don’t just focus on metrics and justifying the ROI in social media. Traditional media doesn’t have a well defined ROI either! Furthermore, he doesn’t think traditional media is dead, he just thinks it’s overpriced.
Marketing for the last 100 years has been all “push” even through social media. In his opinion, email marketing has been ruined. Ten years ago it was very effective, but it turned into daily SPAM so now people hate it. Everyone in social media marketing today tries to close too fast—they need a little patience.
He ended by giving audience members $50 worth of wine on his website for 2 cents as a thank you to the SXSW panel attendees—He hit an emotional center with thousands in attendance.
Be Evil: Does Corporate Responsibility Matter?, 5PM, Monday (#beevil)
Speaker’s twitter handle: @sivavaid
This session focused on whether corporate social responsibility has a net positive or negative impact in society. I attended this session since many government innovations rely on private sector partners. These private sector partners often enter these partnerships as part of their CSR portfolio. Understanding the value of CSR is critical to understanding when private sector partners might be opening to partnering with the government on innovative initiatives. This session focused primarily on the CSR programs and philosophies of two well known companies with CSR programs: Whole Foods and Google. The session turned out to be MUCH more focused on the philosophy behind CSR and social business.
Whole Food’s operational model is called the “virtuous cycle”. Their core values/societal mission = team member happiness + partnerships with vendors/supplies + satisfied and delighted customers + motivated donors+ community and environmental responsiveness.
“This voluntary exchange for mutual benefit creates the ethical foundation of business and that is why business is ultimately justified to rightfully exist within society. This ethical foundation of business doesn’t necessarily mean that everything any particular business does is always ethical, but only that voluntary exchange for mutual benefit is itself and ethical process. A business is still expected to behave ethically in its voluntary exchanges (not lie, steal, or cheat) and to be responsible for any negative impacts it may create (for example, environmental pollution)”—John Mackey, CEO of Whole Foods. In other words, in his opinion voluntary transactions are ethical. However, he does not explain the nature of the responsibility of negative impacts/externalities. This is not typical market economics so it would be interesting to learn more about his philosophy here.
Mackey also published “The Whole Food alternative to Obamacare” in the WSJ Aug 11 2009 with his view on corporation’s responsibilities in the health care debate. He believes that if every company operated whole foods, we wouldn’t need the universal health care that the president wants. He believes that their provision model to employees is something that should be replicated at other companies.
In the speaker’s opinion, Whole Foods is also very prideful. “The heroic business is motivated by the desire to change the world, not necessarily through “services to others” or through “discovery and pursuit of truth”, or through the “quest for perfection” (all three emotions have a definite ‘heroic’ impulse), but through the powerful promethean desire to really change things—to make the world better, to solve what appears to be insoluble problems, to do the really courageous thing even when it is very risky, to achieve what others say is impossible”—John Mackey
Mackey’s view on Adam Smith and capitalism: “I also believe that supplementing the “invisible hand” with a “visible hand”, if done consciously, on an ongoing basis by individuals and corporations around the world, would help push humanity into an era of accelerates progress that would be unprecedented in world history….that is what Conscious Capitalism really means”
Mackey sees it as a responsibility of all good business to practice conscious capitalism and be social business.
On the other hand, Milton Friedman’s position on the social responsibility of business is as follows: “The social responsibility of business is to increase its profits”—The New York Times Magazine, 9/13/70
Google decided it would be very different from competitors like Microsoft. They committed to not be coercive with partners. They wanted to make the way they do business an opt-in model—so it could be considered fundamentally ethical. Google’s mission is to “organize the world’s information and make it universally accessible”. Sergey Brin, the co-founder of Google, believes the perfect search engine would be “like the mind of God”. So in the mind of the speaker, the sin Google is guilty of is Superbia (pride).
One very famous CSR book is “Corporate Social Responsibility”, by Philip Kotler. According to this book, the results of CSR are:
- Increased sales and profits
- Strengthening brand positioning
- Enhanced corporate image and clout
- Increased ability to attract, motivate, and retain employees
- Decreased operating costs
- Increased appeal to investors
However, according to the speaker, there are several problems with CSR:
- CSR is shallow. It’s feel good consumerism. It does not scale, in business jargon. That CSR is “good for business” is really reason enough.
- CSR is anti-political. CSR tactics are often deployed by companies and industries to deflate efforts to regulate. It’s deployed to try to avoid politics.
- CSR conflates the public and the market. It conflates being a consumer versus being a citizen. Market failure is when the market does not satisfy the market good through natural pushes and pulls. Public failure is a new concept. Public failure is when we de-nature/de-fund the state to the degree that they must fail, thus it opens the possibility that the business sector swoops in and provides a service that the public sector couldn’t. For example, public libraries close early but people still need a place to study. So, Barnes and Noble reacts by keeping longer hours and making a profits off of those extended hours. This is an example of business correcting for public failure. Hurricane Katrina is also an example of public failure in the speaker’s opinion. Wal-Mart stepped in for distributing water when the federal government couldn’t. So we celebrated Wal-mart for what they did here. But a lot of people don’t “feel good” about that—they believe the government failed, not that business won, hence “public failure”.
Is Crowd-sourcing the Enemy of Innovation? 11AM, Tuesday (#csuitesourcing)
Speaker’s twitter handle: @MichelleGass @robsong @ suzannelabarre @Crowdsourcing
Panelist Howe invented the term “crowdsourcing” and his definition is giving a job that used to be an individual’s to an undefined group of people via the internet.
Crowdsourcing movements complicate a few traditional business principles. Like, who’s the boss now? Do we work for the crowd or do we work for company, ourselves, etc? There has been a shift from leadership being the “big idea” folks, to the crowd. The shift in perception is that “nobody is smarter than everybody”. For example, there’s a company in Cleveland where the decision making for investment strategy rotates among employees—from executives to the dock workers. The notion is that everyone has value to bring in this area.
Examples of private sector ideation platforms:
- Starbucks: Starbucks believes they have pioneered this new way for customer engagement. They launched an ideation tool in 2008. http://mystarbucksidea.force.com/ . This is still active. The loyalty program came out of “my starbucks idea”.
- Dell: Ideastorm http://www.ideastorm.com/ was deployed to confront some terrible PR. This platform was created for people to submit ideas about “what was wrong with dell” and “how they could do better”. Brought the engineers to the discussion as well, so now ideas are part of the design process.
- IBM: Ideajams are IBM’s approach is co-designing with its customers. (http://ideajam.net/ideajam/p/ij.nsf/welcome?readform)
According to the panel, the future of business is creating organizations that are as innovative, adaptable and inspiring as the people that work within them. It’s about making organizations better and more human.
So then how do a corporation’s desire to “own things” and a creative commons approach to ideation coincide? A new business model is emerging. But how are rewards and incentives designed so everybody wins? Who owns the ideas? Fundamentally, the architecture of Intellectual Property (IP) has not changed from the industrial revolution to the information age. One big difference is in the culture and folk’s tolerance for sharing information. Younger generation grew up with napster—so they have a more “fast and loose” interpretation of IP and ownership. Some businesses take advance of this view of ownership and “good will”. Like threadless: owners get design money for t-shirt designs, but the company keeps the IP. (http://www.threadless.com/select?gclid=CLzLoO-C0acCFQli2godyz5jDg)
How do you deal with situations when the “crowd attacks”? Have to crow a thicker skin. The benefits significantly outweigh the risks. Yes, there are trolls, but the value you gain in relationships with other customers is well worth it.