Saturday, June 20, 2009

Thoughts on Grown Up Digital, by Don Tapscott

And I looked and beheld a great pale horse and his name that sat on it was Net Generation, and the Future followed with it. And Power was given unto them over the Internet, to create with blogs, and wikis, and tweets, and to usher in the New New New Economy.

Here are some of my observations about and around the topics of "Grown Up Digital," by Don Tapscott. In short, it's a good book, not a one-pager, and serves good food for thought -- though I don't agree with all its generalizations. Well worth reading and meditating upon: a keeper.

The general idea is that those currently between 11 and 31 form the Net Generation (NG). NGs have distinct attitudes, values, and life styles, and the motile force behind that distinction is their integration of communication and information processing technologies in day-to-day life. This integration has important implications for the design of institutions: family, democracy, education, work, commerce, and entertainment.


DUMB OR NOT?

Many non-NGs believe the NGs to be the dumbest generation ever. Kids these days, I tell you, with the clothes and the music and the hair... oh sorry, I mean with the texting and the ipods and the twitter... Yes, I'm being sarcastic. But there's a lot of criticism leveled at the NGs: they don't pay attention, they are coddled by their parents and teachers, they can't concentrate on anything for more than a minute, they don't respect their elders' wisdom, etc.

Tapscott presents the critics' position and his short rebuttal in this video; the book elaborates on both. In all fairness, most criticisms of NGs are based on anecdotes, while the rebuttal is based on a systematic proprietary study. Of course, this study has its own critics, who mostly raise questions of methodology.

Because the book's research is proprietary and not available for peer review, I can't address criticisms of substance that hinge on assuming methodological errors. Note that there's no evidence of methodological errors, but closed research is frowned upon by academe and considered suspicious therein. Having worked both in academe and consulting, my view is that the people who paid the $4M for the research have a right to restrict access to their results; given the importance of the topic, partial replications will appear in academic journals eventually.

Even if the methodologists were right and Tapscott's data was full of selection effects, that would only make a tiny difference in the impact of the book. It's a matter of order statistics, you see.


THE MEDIAN NET GEN-ER IS MOSTLY IRRELEVANT

Suppose there are 11 pizza parlors in Extremeville; ten produce mediocre pizza at high cost, one produces great pizza at low cost. The median quality of a pizza parlor is mediocre and its cost is high. Yet, the median quality of the pizza consumed in Extremeville is great and the cost is low. This apparent paradox is solved by noting that almost all pizza consumed in Extremeville comes from the good pizza parlor.

This is why I believe that even if the methodology criticisms were correct, and Tapscott's data were rife with selection effects, it wouldn't matter. If the median NG only uses the new technologies to produce gossip, but the NG-enabler technologies afford the most creative and productive NGs tools, channels, and feedback, we all win.

The idea is that the change in technologies and its effects on the NGs allow future Pages and Brins and Zuckerbergs to flourish, and institutions should focus their attention on these outliers, instead of making laws and designing institutions based on the critics' worry that Page, Brin, and Zuckerberg's NGs classmates are more interested in Kendra Wilkinson's new reality show than in learning calculus or Latin declinations.

To be clear: this is my argument, not Tapscott's, and I present it to make the point that even if the critics were correct it wouldn't matter.


EIGHT NORMS OF THE NET GENERATION

(Need a balance here between explaining the norms and cutting into Tapscott's book sales, so if you want elaboration I recommend reading the book.) NGs want and prize:

1. Freedom. NGs tend to pick the freedom side of the freedom-security tradeoff in many areas of life. This has led to some interesting developments in the workplace and education, and also to some of the most vociferous criticism of the NGs by those who focus on processes rather than outcomes.

2. Customization. Many people like customization, but to the NGs it is part of their basic cultural ethos. Customization is one of the inexpensive luxuries born of the digital nature of most value propositions and cheap short-batch fabrication techniques. Having come of age with these inexpensive luxuries, NGs take them for granted.

3. Scrutiny. Easy access to data allows NGs to check on the authoritativeness of some authorities -- to the detriment of many of these authorities. Add to that an attitude of skepticism and the willingness to spread one's opinion and the NGs are big scrutinizers.

4. Integrity. Huh? Don't they steal a lot of intellectual property? Yes. On the other hand, they're also active watchdogs of the excesses of institutions. Given how thorny issues around IP can get, and how ham-fisted-ly the IP-holders have behaved, let's call this one in favor of the NGs for their policing of the institutional fringes. (My position, not the book's.)

5. Collaboration. Online forums; blog comments; Facebook and Myspace; instant messaging; wikis; open-source software... does anybody not get the point? (Unfortunately, yes.) Too much openness, however, is leaving the NGs privacy-deficient. Those drunken Spring Break photos on Facebook can and will be used against you in a job interview.

6. Entertainment. An outgrowth of both technological lowering of the cost, and economic conditions favoring the production and consumption, of entertainment, again as the NGs came of age -- thus taking it for granted and demanding/expecting it in all facets of life.

7. Speed. Partly because of technological change and partly because they moved much of their communication to asynchronous high-bandwidth channels (that is, instead of meeting in a cafe to talk they send written instant messages), NGs have a preference for immediacy that is much stronger than previous generations. This can be overwhelming even to NGs, though not as much as to those older people.

8. Innovation. Because they were born in an environment that was changing rapidly, NGs are more receptive to innovation; or, better said, because their product-space environment was always turbulent, they never had time to develop the inertia characterizing a majority of the earlier generations.

The book elaborates on the implications of these norms to all institutions of modern life. The following are some of my thoughts on the two that interest me most, education and marketing.


EDUCATION

New learning for a new generation, or a new generation that actually wants to learn and understands that lecture-based education has never worked well?

Sometime in my first week of graduate study, I was told the learning rule: 1% is the lecture, 9% is studying, 90% is solving the problem sets. Practice is how you really learn something. Lectures are not made obsolete by new technologies, they were made obsolete by the technology of printing.

(Philip Greenspun writes a longer piece on this, well worth reading. I especially like the part about separating the teacher from the grader.)

There are some uses for the occasional lecture, especially when there is no alternative source of the knowledge in the lecture: a research talk discussing recent research; an overview of a field motivated by recent news of interest to the class. But, as a general rule, reading or some form of multi-media self-directed study, followed by practice and application, is a better way to absorb knowledge. The lecture does offer the possibility of interaction, of asking the lecturer a question or starting a discussion with the class, which is one of its last reasons for existence.

[How I hate to say this, but] Harvard Business School's use of participant-centered learning does explore this one advantage of the classroom over the multi-media self-directed study materials. Because a well-managed discussion can raise many more questions than study and practice, there's a place for universities as interaction centers. The reason why this is different from the interaction in a online forum is that the HBS participant-centered learning has a strong emphasis on the "managed" part. For all its apparent spontaneous fluidity, the discussion in the classroom is highly choreographed, without appearing to be so to those students involved.

Is it worth it? If well done, no doubt; it combines self-study with community interaction and gets the advantages of both. As it is done most of the time, it's a complete waste of time for all involved. A good study plan, with practice exercises and problem sets, a discussion forum, and good testing materials would replace most lectures that "also use the case method." And would yield greater learning and lower cost.

Elaborating on the ideas in the book, Tapscott writes about the impending demise of the university as we know it in Edge. Sometimes I think "good riddance," sometimes I think universities are foundation institutions in a society; so I'm torn between the piece's position and the value of having research institutions where young minds can be exposed to the best thinkers in their fields. Which is only relevant to those fields where the best thinkers can be found in universities, I guess... I defer to my personal hero's opinion on some academic fields.


THE NEW NEW NEW CONSUMER

Consumers who do research, who communicate with each other, who prize integrity, who care about the implications of their consumption activities: NGs are what the nightmares of those with 1960s marketing attitudes (still widespread in 2009) are made of.

How can you sell the same product for twenty different prices (to extract that sweet consumer surplus) if search engines allow customers to find low prices effortlessly? How can you sell your old products, 10% of which leave the factory defective, when consumers can immediately post their experiences with them and deter those buyers who might get the 90% which work? How can you lie to consumers anymore? -- Yes, if lying, cheating, being asleep at the wheel, not understanding consumers, not tracking their trends, and generally ignoring value creation, is your idea of marketing, then your nightmares have came true.

Same for some marketing academics: If your brand new marketing communication textbook has a section on "the Internet," tacked on at the end, ignoring the distinctions among email campaigns, SEO (Search Engine Optimization), online forums, Twitter, blogging, Facebook, etc, and their implications for the new value proposition, you're not avoiding irrelevance. You're just signaling how clueless you have become.

Ironically, NGs make better marketing targets than the previous generations. The very social norms that make them harder to reach by incompetent marketers, oops, I mean "marketers who cannot adapt to change, learn new material after their MBAs, or understand the analytics revolution," make NGs great sources of business intelligence, great collaborators in new product design, and customers highly receptive to that great marketing tool "planned obsolescence," or in its more politically correct name, "new and improved next generation product."

I have many thoughts on this, which I'll probably write up in the future, but the essence of these thoughts is captured above. Some of them touch on the discussion in the book, some of them are orthogonal and more technical marketing and strategy points. However both Tapscott and I (and many others) are in agreement with the basic point:

Marketers who cannot learn and will not change are toast with the NG. Much more so than with the previous generations of consumers.


FINAL THOUGHTS

This book is definitely worth reading and pondering. I bought a copy even though it is available from the SF public library, which -- given the overpopulated shelves of my humble abode -- is a very strong recommendation. Definitely worth elaborating upon and arguing with, either inside your head or on the Grown Up Digital web site.



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NOTE: The opening paragraph is my take on Revelations 6:8 after reading Grown Up Digital, not a quote from the book.

Thursday, June 11, 2009

Quants make good scapegoats

Inspired by this post by Eric Falkenstein, here's some advice to managers:

You need a quant. If there's any risk you'll make a mistake, and if your boss, board, or stockholders are dumb enough to accept a pass-the-bucket excuse, you need a quant!

Quants make good scapegoats. Nobody likes smart people, nobody understands their elaborate models, and everybody wants to beat up the kids whose success is based on being smart and knowing difficult technical stuff.

You may be thinking finance is the only field blessed with such great flak-catcher posts as "Chief Economist" and "Head of Analytics," but if you're in marketing or strategy, quants are now available to you as the whipping boys for the ignorant to feed upon.

Forgot that marketing is about creating and delivering value to customers, first and foremost? (Oh, you were texting during that MBA class?) No problem, for only a zillion of your stockholders' dollars you can buy a CRM system that will support your multiple decisions to force churn the bottom 10% of customers -- until there's no one left. Then you don't need to bother with the pesky customers and can blame SAP/SAS/Accenture/Whomever. Never mind that these CRM purveyors tried hard to explain what you were doing wrong; they'll take the blame because they can't succeed by attacking their clients. At least they understand this.

No time for strategic thought? Why bother with complicated things like understanding the sources of differential advantage or identifying potential threats? You can get always a quadruple-PhD's macro-economic model to take the blame when you miss out subtle indicators, such as your competitor buying your only distribution channel. Odds are that your golfing buddies... I mean your board will side with you over the kid who can't tell a mashie from a niblick.

Don't like your quants' recommendations? Ignore them. Got in trouble? Point the finger at the nearest quant. Odds are that when quants start explaining nobody will listen, anyway. Nobody ever wants to listen to knowledgeable smart people. And the quants will be on the defensive, with only the truth on their side... and truth is so overrated in these post-modern times.

Get a quant! They're cheap insurance against your incompetence.

Because not everyone may notice this is sarcasm, my position on the above is summarized by the chyron with which I finish all my modeling classes:

Unlike the managers who blindly trust them, computer models cannot be fired.

Thursday, June 4, 2009

Some observations on being an Accidental Tourist

In a bit over 20 years of business-related travel, most of it for one- or two-day engagements of the peroration-plus-consulting type, I have collected some ideas that have made travel less miserable.

These are ideas that work for me, derived from observation, planning, experimentation, and reflection, all in the context of what I do in these trips, which is talk to people about highly technical business topics, generally wearing business attire and usually including a presentation of some kind that requires last-minute edits and some data processing on-site. Yes, these details matter. Little of what's below applies to Jean-Michel Jarre going on tour.


Don't check bags. The site OneBag elaborates on this -- for tourists, mostly. As a business traveller for whom flexibility is important, I find that being able to carry all my stuff, fast and without having to negotiate ramps for wheeled trunks, is a great advantage.

After working through a large collection of rolling carry-ons and hanging garment bags, I've settled on a Victorinox trifold bag. Yes, the tri-fold may harm the suits if you're such a novice at packing that you don't know how to pack a suit for travel. But the small size and light weight, the large open space, and the backpack conversion (for when you have to lug it over miles, oh, say, in Heathrow airport, if you're ever so unlucky as to be forced to fly through it) are worth the small risk.

For some one-day trips, I take only a Brenthaven Urban backpack; its design and all-black look are professional enough to not clash with the clothes, and judicious choice of suit and chinos will allow the suit jacket to work as odd jacket (hung during the flight), while the suit pants & vest and the other clothes take up the rear compartment of the backpack. (Bundle packing is worth learning, if you travel much.)

If you need to get a large bag from place A to place B when you fly from place A to place B, say a lot of A/V equipment in a Pelican case, use a messenger service like UPS or FedEx. This doesn't work well internationally, but is a good alternative domestically.


Multitaskers are very important. Smart phones and high-end laptops are worth carrying; the Kindle, not so much. Because I do data analysis and the occasional data processing on the road, I have to carry a full fledged MacBookPro instead of a MacBookAir. I'm hoping for a new iPhone next week which will replace a gaggle of small electronics: phone, iPod Touch, voice recorder, GPS, camera, camcorder, and ebook reader.

The main point about multitaskers is not the particular choices I made, but an attitude of doing more while carrying less. For entertainment, I used to carry DVDs to watch; now I have movies on the computer. To work on downtime, I used to bring a stack of papers to read; now I bring them as PDFs. If in my office I'd print them to read off paper, but on the road I make my adjustments.

The quintessential multitasker, the Swiss Army Knife, of which I have several, is sadly no longer a staple in my travel, as the ridiculous "security" rules in place now preclude it.


For some critical tasks, you need the optimal tool, even if it is a unitasker. Neckties are unitaskers, in fact their task is just to be present, but they are a part of business attire and must be worn to many social functions. Presentation remote controls are unitaskers, but the difference between being at the podium operating the computer and doing the theater that is a live presentation makes it worth carrying some of these. (One? Are you kidding? Critical equipment requires backup.)


Backups are very important. Everything in the laptop is replicated in a portable hard drive, obviously, and all the critical materials are replicated again in several flash drives, each with a full set of copies. Everything important is also on the cloud -- encrypted, of course. But that's just the obvious backing up.

There are other things to backup: your flight, your hotel, your transportation. Having backup plans for these help. It doesn't mean having the reservations on several flights and hotels, but rather knowing available alternatives. There's a big difference between letting the front desk at the hotel try to help -- assuming that they try -- and having a list of hotels and their phone numbers ready.

Backing up your presentation doesn't mean just backing up the presentation materials. It may mean backing up the presentation strategy. My most important backup is a high-quality print of my handout, which can be photocopied just-in-time if all other materials fail. (I generally send the handout as a PDF early, so the client can make and distribute copies in advance. And I always try to get the contact of the point person whose job is to get these handouts made, distributed, etc. Of the times I don't get a point person contact, it's best to carry copies myself. Pays to make 1-page handouts.)

I always carry my prescription glasses, even though I never wear them, which makes them no-taskers. They back up my eyes' ability to hold contact lenses. If it's temporarily lost, I don't want to be blind. (Of course I carry extra contact lenses; but that's no use to me if for some reason I can't wear them.)

And entertainment or social commitment backups are also a good idea. If I was planning to spend a free afternoon hiking in the hills near my hotel, a list of nearby museums and rare music stores is a good thing to have in the event of rain. If my plans to exercise vigorously are cancelled by being tired from presenting, having a map of local parks and eateries is a good idea.

The main thing here is the attitude that there must be more than one alternative to everything important. It doesn't need to be planned -- though I've found out that planning and researching does help. With time and experience, I have built a personal library of ideas to serve as alternatives at the drop of a hat. Now I never need to watch TV in the hotel to pass the time. (I take a look at the news, especially if I find out via the web, feeds, and twitter that there's something interesting there.)



Always carry a notebook and pen. Ubiquitous capture, as they say in Getting Things Done. In my case, it's more a matter of remembering ideas, of quickly sketching out presentations, or doing some recreational math or drawing while on the move. Making notes helps me remember things (as Field Notes say, I'm not writing to remember it later, I'm writing to remember it now).

I've used Moleskines more than other options because I like the elastic close, the place-marking ribbon, and the back pocket. But I'm not a snob, and use various notebooks. Mostly I buy these from the museums I'm a member of, supporting the arts and differentiating my notebooks from those of other consultants.

I like fountain pens, but they are not practical for in-flight use. Even the Rotring Initial doesn't work well -- though it doesn't leak. I've used a variety of high-tech pens (including the Fisher space pen), but I found that carrying a nice Montblanc Starwalker Rollerball and a couple of Papermate ballpoints is best. The MB impresses upon people what good taste I have (it was a gift) and the others give me two additional colors to think with and they're essentially disposable (I won't care if a borrower never returns them).


Audiobooks turn wasted time into useful time. True in all situations, like walking or running, and certainly for waiting in line while the airlines mutate their customers from sheep to sardines. (Mintzberg's joke.) But in my case audiobooks make a significant difference in the travel experience. My eyes tire very easily when reading from an unstable surface; even watching a movie is difficult. (I wear very strong contact lenses.) So, instead of trying to work or read a paperback, I just listen to audiobooks. Audible has quite a large selection of both fiction and non-fiction, and I can easily go through my Platinum membership's two free books a month. In fact, I keep buying extra credits.

Of course podcasts are a cheap alternative, and sometimes a good way to get up-to-date on some specific areas. However, other than the WSJ Morning Read (which I get gratis as a Platinum member), most business-related podcasts are disastrously bad, and podcasts about strategy, innovation management, marketing, analytics, statistics, and business economics -- my interests -- are even worse. I do listen to many TWIT podcasts and several non-work related ones.

I find that I retain less of audiobooks than I do of books I process visually (ebooks or paper books). For scifi and other fiction that's not a problem, and for many non-work related books that's acceptable. For work-related books, or books that I really want to explore, I end up buying a visual copy in addition to the audio copy. (How about bundling the three options, publishers, ebook, book, and audio file, for a discount? Huh? Too advanced for you?)


As with client, so is locale and trip: a little research does a lot of good. Taking a look at a map and figuring out how your hotel, client, and airport relate to each other, figuring out the major thoroughfares, locating restaurants and convenience stores nearby, picking interesting locations to visit if there's downtime, the possibilities are endless.

Same with the trip: research the airports involved, if some are unfamiliar to you, and the amenities available at each; research the hotel and its amenities and the neighborhood. Weather is always good to know, and sometimes a quick question on internet forums catering to your personal interests may lead to interesting discoveries.


Travel vests are lifesavers. I used to wear tactical pants and tactical shirts to fly. This is a bad idea: you spend a lot of time at security emptying and refilling pockets. Two better alternatives are the fanny pack and the travel vest. With either you just put them on the conveyor belt without taking anything out of their pockets. I used to prefer fanny packs (worn in front), but some places have "no bag" rules, and some airlines want to count them as your personal piece of luggage, so travel vests won.

In my experience nothing beats a Scottevest travel vest; its pocket-in-pocket architecture allows me to keep things organized, its structure lets me carry a lot of weight with comfort, and its Personal Area Network is a great way to keep wires out of the way. I have several cargo vests, including two Scottevests, a Columbia, a Trail Designs, and a Paul & Shark, and I'm buying more Scottevests.


Avoid airline food, drink as much water as they'll give you, and carry multivitamins. Airline food is not as bad as it's made out to be, but just barely. If you want to eat airline food, ask for one of the alternative meals when you make the reservation. Alternative meals are usually handled more carefully and generally better prepared.

Depending on the arbitrariness of the day's security personnel, you may be able to bring outside food into the plane, say a sandwich from a good deli. I used to bring several protein bars and eat them in lieu of food. If all fails (the TSA page says you can bring food, but you might be made to miss your flight by the petty tyrants manning the x-ray machine if you argue that point with them), not eating for a few hours is not a big deal.

Water is important, though. Dehydration decreases your ability to speak clearly, your mood regulation, your cognitive abilities, and especially your brain executive function. Keep hydrated. I'm shameless in my quest for airborne water; you need to be, given how unfriendly the skies have become.

Multivitamins are important because on the road you may not have time to eat right, or to eat, outright. Vitamins are more necessary than other nutrients, so making sure they're available is important.


Plan your clothing, and I don't just mean the outfits. But do plan the outfits. In my case this is fairly easy as I travel with conservative color schemes for everything but ties and pocket squares. (What? Wear a tie without a pocket square? The horror!) Add backup underwear and shirts. You always end up needing one more than you thought.

Not wearing tactical pants for travel means you can wear chinos, which -- in a suit emergency or in some social situations -- can dress down a business outfit to a business casual outfit. Yes, there are many places where this matters. Chinos can then multitask as travel, walk-around, and business casual clothes. Sorry, 5.11 pants.

Black sneakers are not shoes. But, as a last resort, when your oxford shoes are dripping wet due to your inadvertently walking on the rain-filled potholes that your client's city calls sidewalks, they might work as part of a business casual ensemble. And you can exercise with black sneakers as well as with those with funny colors.


Exercise works out the kinks of travel. Even if the hotel doesn't have a health center (what kind of cheap-ass hotel doesn't have a health center of some kind or a swimming pool?), doing some calisthenics in your room or going for a run -- even an energetic walk -- helps get those lactic acid deposits out of the muscles. It also helps relax and re-oxygenate your body.