While modern day A.I. or machine intelligence (MI) hype revolves around big ”eureka” moments and broad scale “disruption”, expecting these events to occur regularly is unrealistic. The reality is that working with AI’s on simple routine tasks will drive better decision making systemically as people become comfortable with the questions and strategies that are now possible. And hopefully, it will also build the foundation for more of those eureka(!) moments. Regardless, technological instruments allow workers to process information at a faster rate while increasing the precision of understanding. Enabling more complex and accurate strategies. In short, it’s s now possible to do in hours what it once took weeks to do. Below are a few things I’ve found helpful to think about when drive machine intelligence at a large organization, as well as what is possible.
- Algorithm Aversion — humans are more willing to accept the flawed human judgment. However, people are very judgmental if a machine makes a mistake – even within the lowest margin or error. Decisions generated by simple algorithms are often more accurate than those made by experts, even when the experts have access to more information than the formulas use. For further elaboration on making better predictions, the book Superforecasting is a must read.
- Silos! The value of keeping your data/information a secret as a competitive edge does not outrun the value of potential innovation or insights if data is liberated within the broader organization. If this is possible build what I call diplomatic back channels where teams or analysts can sure data with each other.
- Build a culture of capacity. Managers are willing to spend 42 percent more on the outside competitor’s ideas. “This is why consultants get hired,” Leigh Thompson, a professor of management and organizations at the Kellogg School says. “We bring in outside people to tell us something that we already know,” because it paradoxically means all the wannabe “winners” in the team can avoid losing face. It’s not a bad thing to seek external help, but if this is how most of your work is done and where you go to get new ideas you’ll have problems. As a residual, the organization will fail to build strategic and technological muscle. And it’s likely to create a culture which emphasizes generalists, not novel technical thinkers in leadership roles. In turn, you end up with an environment where technology is appropriated at legacy processes & thinking. Not the other way around as it needs to be if you want to stay relevant. Avoid the temptation to outsource everything because nothing seems to be going anywhere right away. That 100-page power point deck from your consultant is only going to help in the most superficial of ways if you don’t have the infrastructure to drive the suggested outputs.
- Organizations need to evolve their processes in step with technology. Not fit new technologies to old/outdated processes. If so “money” is left on the table that isn’t even considered or known due to lack of domain depth, which creates hierarchical bottlenecks that inhibit innovation and merit-based thinking. As a result, the talented people in your organization will defect, leaving mediocre skill sets to run general operations which standardize low common denominator outputs. As well as not maximize the prior investment in capabilities or assets which may have offered a competitive edge had they been seen through sufficiency.
Our traditional institutions, leaders, and experts have shown to be incapable of understanding and accounting for the multi – dimensionality and connectivity of systems and events. The rise of the far-right parties in Europe. The disillusionment of European Parliament elections as evidenced by voter turnout in 2009 and 2014 (despite spending more money than ever), the Brexit and now the election of Donald Trump as president of the United States of America. In short, there is little reason to trust experts without multiple data streams to contextualize and back up their hypothesis.
How could experts get it wrong? Frankly, it’s time to shift out of the conventional ways that we try to make sense of events in the political, market and business domain. The first variable is reimagining information from a cognitive linguistic standpoint. Probably the most neglected area in all of business and politics – at least within the mainstream. The basic idea? Words have meaning. Meaning generates beliefs. And beliefs create outcomes, which in turn can be quantified. The explosion of mass media, followed by identity driven media, followed by social media, and alternative media. We are at the mercy of media systems that frame our reality. If you doubt this, reference the charts below. Google trends is deadly accurate in illustrating what is on people’s mind the most, bad or good, wins – at least when it comes to U.S. presidential elections. The saying bad press is good press is quantified here. As is George Lakoff’s thinking on framing and repetition (Google search trends can be used to easily see which frame is winning BTW ).
Within this system, there is little reason to challenge one’s beliefs and almost nothing forcing anyone to question their own. Institutions and old media systems used to be able to bottleneck this, they were the only one with a soap box and information was reasonably slow enough. To outthink current systems there is a need for a combination of sharper thinking, being able to quantify unorthodox data such as open source intelligence (OSINT) and creativity that traditional systems of measurement and strategy lack. Business, markets, and people strive, to a fault, for simple, linear and binary solutions or answers. Unfortunately, complex systems i.e. the world we live in doesn’t dashboard into nice simple charts like the one below. The root causes of issues are ignored, untested, nor contextualized, which creates only superficial understanding on what affects business initiatives.
I know this may feel like a reach in terms of how all that is mentioned is connected so more on OSINT, data, framing, information, outcomes, and markets to come.
While investors were in shock, open source signals such as Google trends pointed to “Leave” being predominate the majority of the time, illustrating expert and market biases. Perhaps they should work on how to integrate these unconventional data streams better (sorry couldn’t help it). The UK’s decision to exit from the EU is part of a larger global phenomena that could have been understood better with open source, not just market, data.
The world is growing more complex. Information is moving faster. Humans were not evolved to retain or understand this mass output of (dis)information in any logical way. As a response, a retreat to simple explanations and self-censorship towards new ideas, that might challenge one’s frame, are ignored and become the norm. Populist decisions are made and embraced, often times reactionary towards the establishment or elite. Multi-national corporations and elites will need to step outside of their bubble and take note of nationalist, albeit sometimes isolationist, such as Donald Trump, Bernie Sanders, President Erdogan of Turkey, Marie Le Pen’s Front National of France, Boris Johnson – Former Mayor of London and Brexit backer (good chance he take David Cameron’s place), Germany’s AFD and the 5 star movement in Italy gain in both popularity and power.
In addition to the more media coverage, people were associated more with the leave campaign, which is an advantage. During a political campaign choices and policy lines are anything but logical, they tend to fall on emotional lines, so it’s important that institutional communications have a noticeable figurehead, especially in the age of media. It says something when the top people that are associated with remain are Barak Obama, Janet Yellen and Christine Lagarde. Note that David Cameron is more central with leave. None the less the pleas by political outsiders and institutions such as the IMF and World Bank for the UK to remain in the EU, potentially caused damage to the “Remain” campaign. UK voters seemed to not want to hear from foreign political elites on the matter. This is illustrated by the connection and proximity of the “Obama Red Cluster” to the French right wing Forest Green cluster (and the results) below. The “Brexit” could lend credence to the possibility of EU exit contagion. There are very real forces in France (led by the Front National) and Italy (led by the 5 Star movement (who just won big in elections) that are driving hard for succession from the EU and or potentially the Eurozone.
- Seeking shelter from volatility, banks (especially European ones) are fleeing to the gold market. While this is to be expected, dividend based stock, as well as oil, would be attractive to those seeking stability as well.
- Thursday’s referendum sent global markets into turmoil. The pound plunged by a record and the euro slid by the most since it was introduced in 1999. Historically, the British Pound reached an all-time high of 2.86 in December of 1957 and a record low of 1.05 in February of 1985.
- Don’t count on US interest rate hikes. Yellen has expressed concern for global volatility on multiple occasions. The Brexit just added to that. The Bank of England could follow the US Fed and drop interest rates on the GBP to account for market uncertainty.
- If aggressive, European uncertainty could be an opportunity for US companies to gain on European competitors. Due to the somber mood within Europe, companies could either be more conservative with investment, leaving them vulnerable.
- Alternatively, the Brexit may trigger more aggressive U.S. or global expansion by European Companies while Brexit ramifications are further understood.
- The political takeaway is the remain campaign was relatively sterile, having no figurehead or clear policy issues directly relating back to the EU. This was reflected by the diversity in associated search terms related to the “Leave” campaign, in addition to Angela Merkel, not an EU leader such as European Commission President Jean-Claude Junker, once again as being seen as the defacto voice of Europe.
Recently I’ve been thinking of ways to detect bias as well as look into what makes people share. Yes understanding dynamics and trends over time, like the chart below (Topsy is a great simple, free easy tool to get basic Twitter trends), can be helpful – especially with linear forecasting. None the less they reach their limits when we want to look for deeper meaning – say at the cognitive or “information flow” level.
Enter networks. The advantages in understanding at a much deeper level are not possible to do with standard KPIs like volume, publish count and sentiment over time. Through mapping out the network based on entities, extracted locations and similar text and language characteristics it’s possible to map coordinates of how a headlines, entities or article exists and connect to other entities within the specific domain. In turn, this creates an analog of the physical world with stunning accuracy – since more information is reported online every day. For example, using to online news articles and Bit.ly link data, I found articles with less centrality (based on the linguistic similarity of the aggregated on-topic news article) to their domain, which denote variables being left out (of the article), typically got shared the most on social channels. In short, articles that were narrower in focus, and therefore less representative of the broader domain, tended to be shared… This is just the tip of the iceberg.
It took a while to come to this conclusion. When I first started consulting some years back, I thought it was about insights and social data. Now people are onto “insights”, “social media” and “big data” (ad nauseam). What consultants and practitioners should really be trying to do is help organizations make more contextual decisions, faster.
You may note that I used to call this blog Intelligence, Communications, Change. The order is not coincidental.
Its reasoning goes as such:
- Unfortunately, organizations are not set up to handle the majority of intelligence or “insights” that we may find when mining the web or other data sources.
- I gather intelligence, communicate and then try to change a given instance or situation. Always changing and making decision more accurately and faster.
- To have the most benefit from analytics and data means turning the insights or analytics unit into an ongoing change management program. With the ultimate goal being to set up the organization to think contextually, as well as be ever cognizant of the “perfect is the enemy of good” principle – an “ok decision” that is fast typically has more value than a perfect one down the line.
Never before has there been so much information available to us. Every day there are 3.6 trillion words created on email and social media — the equivalent of 36 million books. Today more data crosses the internet every second than was stored in the entire internet just 20 years ago. The bigger risk is being tame and will put you in the doghouse faster than any sort fallout a thoughtful experiment would have. Over a long enough time, eventually, people and companies can piece together what ever competitive advantage a person or company may have. Those concerned with protecting IP or “trade secrets” will be irrelevant and miss opportunities simply because of the rapidly deteriorating value they perceive in their IP.
As the great basketball coach John Wooden said:
“If you’re not making mistakes, then you’re not doing anything. I’m positive that a doer makes mistakes.”
Jose is trying to learn how to get a date . There’s a conference at a local hotel on how to pick up women. On his way to the room, Jose’ encounters two doors. One leads to the conference taught by men on how to pick up girls. The other door has a sign that says “Successful single women’s conference. Please join us for a drink, anyone is welcome”. Jose chooses the first door as he had planned, and continues learning about how to pick up women. The EU relationship with using technology is like Jose’s approach to trying to pick up women, hesitation and unwillingness to adapt in real-time, to the peril of the end goal – i.e. institutional.
One day I was talking about online media monitoring to the institutions “social media expert”. I was asked “why do we need to understand what people are saying about us?” I was shocked and had no answer except to point out Interest in the EU has gone down every year since 2004 http://ow.ly/8w2Gs. Specifically alarming was that the Parliament, which is supposed to be the extension of the people, had the lowest interest rate.
Now having worked in US politics, a good place to start making a more legitimate government, is being more representative of constituents..and understanding what people are saying about you allows you to create better policies and messages that can help engage people, and perhaps increase the voting rates.
Both EU firms and institutions spend way too much time discussing what technology such as social media is, or what it means, but never act. For example Friends of Europe just released a paper about social media . Frankly I found it pointless, uninteresting, and six years too late.
In the globalized future hesitation is dead, improvisation is king, and competition will be fierce…
Thinking about the “social media experts” statement further, I concluded it wasn’t that online monitoring wasn’t useful for their situation, but it’s use would have created a real-time approach. This is the antithesis of institutional process Europe is way too familiar and comfortable with. And incentive for the people working in the institutions wasn’t there either.
In the USA, competition has led to campaigns and politics becoming a science. And voting rates + political involvement have gone up.
The 2012 campaigns featured natural language processing, text mining, sentiment analysis, and data scientists. These technologies will marginalize every medium and word. There was no room for “educated guessing”. This is efficient, saves time and money, plus leaves the politicians to focus on empathizing more with the electorate. Forward to the EU. The system is not competitive. The money is provided by the public, and the European Commission is in charge of mobilizing people in a non-political way, which is inherently very, very difficult.
The future will embrace non-understanding, chaos and real-time data, you don’t get the luxury of writing a 10,000 word strategy paper. At present the EU mindset is not equipped to handle this transition. It must remember if it wants to hang out with future technology, it has to first quit talking, and ask it out on a date.