Low impact of digital suggests acceleration of pace of change in future

It is customary to say that we are living very innovative times, that the changes we are going through are huge, and that our economy is fast-paced and innovative. When asked for evidence, technology pundits will always come up with the same answer: Internet and Smartphones are ubiquitous. While there is no denying the fact that both the Internet and Smartphones have had a tremendous impact on our lives and the way we do business, our times may well be far less innovative than originally thought. In his piece “Beyond The Internet, Innovation Struggles to Lift Productivity” (published by WSJ on August 12, 2015), Greg IP offers explanations, beyond mere appearances. As I read his piece this Summer, it also triggered thoughts that, if anything, one will have to accelerate the integration of digital in the “real world” in the next few years, not slow it down. This may come as a shock to many people.

The crux of the problem is here: does technological innovation have an impact on overall productivity? Apparently it doesn’t (“productivity grew just 0.4% per year over the past five years, one of the slowest stretches in the period since World War II” says IP). Many things, beyond the Smartphone, have not changed that much. In the past 30 or 40 years. Indeed, according to Greg IP, there are three possible reasons for this:

1. pessimistic assumption: innovation is happening and is grossly exaggerated. It has no, or not much impact,

2. optimistic assumption: it does have an impact but it can be measured,

3. neutral (neither optimistic nor pessimistic) assumption: it is happening but has no impact on the “real” world. It only

Construction of the metroplitain subway in paris 60 728

Legend: It took four years for Paris Metro engineer Fulgence Bienvenüe to finalise his plans for the crossing of the Seine. In 1910, he directed the works which led to the freezing of the soil for a length of approx. 70 yards with 57 17m deep shafts filled with brine of calcium chloride at -27°C. Imagine doing that in 2015? In 2015, the extension of line 4 for 1 extra station beyond the peripherique was finally completed after 4 years of disruption.

Explanations for the low impact of digital on productivity gains?

IP opts for solution number three and has an explanation for this (based on the work of Michael Mandel for the progressive Institute):

1. advances in applied sciences (like thermoplastics and maybe new alloys and metals) have stalled. All the new products which the 1950-1960 golden era of chemistry has produced are now ubiquitous. Innovation is only marginal. biosciences aren’t working – this is IP speaking – or rather are unable to produce such breakthroughs as the invention of antibiotics. A rather negative statement, yet many of my discussions with my scientific-trained wife end up in the same alley: there are few advances in those departments nowadays, or at least they tend to be less spectacular,

2. productivity gains are far less impressive – still Greg IP speaking – than ever before. Planes carry more people but there aren’t very different from what they used to be in the late 1950s. With With the loss of the Concorde, one may even find that speed has decreased. One of the reasons for this may be that our Society is less focused on innovation, and technological prowess, and more prone to raise issues about safety. Both subjects aren’t that compatible,

As our workforces (in Western countries at least) are moving rapidly away from manufacturing and focusing massively on service and knowledge work (I’ll get back to that when I analyse the latest McKinsey report), I would however disagree with IP’s point about productivity gains. Even though it’s hard to measure. I know for sure how I can assess the impact of new technologies on the kind of work that I, and our consultants at Visionary Marketing, are doing. Most of us are able to manage or even deliver, single-handedly, up to 10 different engagements at the same time. That would not have been possible even 10 years ago. Maybe the maximum of projects I could have managed up until the end of the 1990s was 2 or 3 (I mean large ones). The increase in productivity in that department, really is spectacular. Yet, it is hard to measure with hard facts and figures. It took years before can manufacturing was taken into account in the calculation of GNP according to French economist Daniel Cohen, it may well then take another 10-20 years before IT and digital are actually accounted for in productivity gains when economists decide to measure them.

All I know however is that the current impact of digital on most industries is still weak and changes are taking place very slowly. It may not look like that to many professionals who are already struggling with the idea of making digital technology and ally in their daily tasks, but if anything, the pace of change is bound to accelerate; not slow down. That’s how I see and interpret Mandel’s study: productivity gains due to digital may be low at the moment, but chances are that, for that very reason, the implementation of digital change in organisations will tend to intensify in the future. Be ready for it.

Internet Pioneers Prague Meeting Highlights Need for ODR (Online Dispute Resolution) in E-commerce

These are my minutes from the discussions amongst the members of the private Youstice* meeting which took place in Prague on October 18-19, 2014 at the Aria hotel, right in the centre of the Czech capital, and barely a stone’s throw from the house where Franz Kafka used to live. Yet, our discussions were by no way Kafkian. On the opposite, they made it possible for us to link all the issues related to today’s e-commerce customer relationship management. The notions of trust and respect were at the centre of all debates, therefore highlighting the need for trusted third parties, mostly in Europe, even though the approach, as often, is different from country to country.

[*Disclosure: Youstice is my client]

ODR - Doc Searls

Doc Searls in Prague: despite what the message in Czech on the screen says, a clear signal was sent by the co-author of the Cluetrain manifesto during our meeting: respect your clients!

E-commerce: it’s a matter of trust

Doc Searls’ initial title for this discussion was “terms and policies individuals assert”. The discussion started with a consensus around Doc’s introduction to the meeting: “freedom of contract was established a long time ago in order to do business but in 1943, in order to gain scale, the law was changed, which means that one party is issuing the contract and the other is forced to accept or reject it (as when we buy stuff from Websites and are forced to accept terms of conditions which keep changing)” Doc said. Doc Searls, for those who can’t remember, is a co-author of the Cluetrain manifesto, which is still available at http://cluetrain.com; a fundamental piece of Internet marketing literature which was already pinpointing the need to consider Web viewers not as “eyeballs”, but human beings(1).

As is always the case with the Internet, all users are decision makers, whether some merchants like it or not; and from there came the idea of ‘do not track(2)’. “We are right at the beginning of that” Doc went on. A company called the Respect Network(3) have issued a document entitled the “respect trust framework(4)” which spells out principles like “both parties will respect the boundaries of the other party”. These issues of trust and respect are at the heart of the need for Online Dispute Revolution (ODR) as we will find out later on.

Two parties of equal power

Essentially, there is a need to “establish contracts between two parties of equal power” Doc went on. It is very early days but one thing that is happening is that “the system we have is broken and it needs to be fixed”. What was working well for few large companies in the industrial age isn’t working that well in the Internet age at all. “A lot of people are coming to us from Salesforce.com and other large Internet companies” Doc Searls added, and they understand that they need to deal with customers in a much better way. They used to think we were “communists” but this is over, they are jumping on the bandwagon now.

A new effort is also going on in the UK about what Doc called “consent receipt” for which any time a customer gives consent, they get a receipt. “This is a step forward in the right direction” he added. They are working on the “log in with respect” button with regard to Facebook and other social connect mechanisms. It’s hard to say what Facebook will be up to with your data. “If one comes up with this alternative button, there’s code which one will be able to install on site-side. This ensures that one enforces respect and issues statements you won’t tamper with users’ data” Doc explained. January is the potential release date, currently going through Kickstarter.

B.A. may not need an ODR (Online Dispute Resolution) system, but smaller players do

Esther Dyson, once head of ICANN in the early days of the Internet, joined the conversation mentioning that if there is “an issue with privacy, there is also one with regard to trust”. “British Airways doesn’t really need an ODR system like Youstice because they already have a reputation” Dyson said; even though there has been some traction with larger merchants and e-merchants which would tend to prove that a trusted third party for dispute resolutions is not only a technical solution; it is also instrumental in reassuring clients who expect neutrality and fairness. “The target for ODR is the sites that customers don’t trust” Dyson went on. Respect isn’t enough. Indeed, consumers want to be able to trust the shops they buy from. This is only natural in an increasingly globalised world where extra European buyers can make online purchases from 3-4 different merchants, not always located in the same country. It is hard to trust someone you cannot see in a country you know nothing about.

ODR - Esther Dyson

Esther Dyson (middle) with entrepreneur Zbynek Loebl (right). Meeting with Esther was like meeting a legend. The first time I heard about the Internet was in a Channel 4 program in 1994! (the program was entitled “Visions of Heaven and Hell” things haven’t changed that much after all!

The aim of ODR: reduce the number of disreputable merchants

“The ODR promise is that we’ll give customers the potential to negotiate one to one and resolve issue on an individual basis” Esther Dyson pointed out. The idea is to reduce the number of disreputable merchants. One of the issue with privacy though, is “that you never know when it’s been reached; you only know when it’s too late” the former head of ICANN and member of the Youstice board of advisors added. A tower of Babel, and the need for a common language Trust and respect aren’t sufficient, and there are more things in that balance of modern e-commerce which is more and more a cross-border issue: “there is a need for an enforcement mechanism and current legal systems can’t help because they are different in all parts of the world” explained Zbynek Loebl, co-founder of Youstice and our host for that week-end in Prague. And it’s very hard to predict that such enforcement mechanisms could be in place any time soon according to the Czech entrepreneur.

Joyce Searls, co-president, with her husband, of Searls Group(5), commented on Zbynek Loebl’s statement: “there are a lot of little things which can create a river of change when all those efforts will be aggregated and it won’t solve the problem just on the legal side but on the company side too.

We have been tracking this area for so long and it seems that something is happening here at last and all these things are coming together. Things have to be solved,” She said. It is no longer possible indeed, to ignore the need for respect and trust on the part of clients, as well as the requirement to solve disputes when they arise. The future of e-commerce hinges on that, the need to fix its principles, both ethically and technically. Online Dispute Resolution is part of that.

“Resolving claims is how you build a reputation” (Esther Dyson)

Pablo Cortes, our Spanish representative – also a Professor from the Leicester University in the United Kingdom, emphasised the requirement for the market to evolve beyond current practices: “trustees have been in the market for a long time and they have had their code of conduct,” he said, “but if a customer complains about a breach of privacy they never do anything against large businesses because there is a conflict of interest.

Yet, settling disputes isn’t just a negative thing, as pointed out rightfully by Esther Dyson: “one has to understand”, she commented, “that resolving claims is how you build a reputation”. Zbynek Loebl can however see “that this movement is happening, slowly but surely. The obvious example is BBB(6) in the US and there are similar trust marks in Europe” he said. “We at Youstice have well established that retailers could see that improved public policies would be seen as positive by customers and retailers alike and it could be a game changer. And it’s a matter of things catching up with all”.

ODR

The BBB Website banner: for US businesses only

Professor Ethan Katsch(7), who is credited for inventing the field of ODR(8) (Online Dispute Resolution) added that “conflicts of interest become more prominent because of so many entities being in relationship with so many others. You have got to build trust in spite of these conflicts of interests. The old way of building trust was to avoid conflicts of interest,” ODR offers a way to table these issues and solve them. “Is it safe to buy from this retailer?” Asked Zbynek Loebl.

A couple of months ago he just got an email from a VP from a retailer: “we have a request that someone from a country wants to buy from a small e-shop from France, and they want to know whether this e-merchant is safe to buy from; can you help us?” “This,” Zbynek Loebl said, “is a very simple issue, a very simple question and yet, answering that question is almost impossible and the reason for this is globalisation. There are still no simple answers to such simple questions but there are potential solutions.”

ODR

Internet pioneers: some of the attendees of the Prague meeting on Saturday 18 October, 2014

A simple complex question

As a matter of fact, this isn’t a simple question, as pointed out by Esther Dyson in response to Zbynerk Loebl’s anecdote. Yet, with such complex issues, third party services can help: “If customers were asked to have their problems solved by internal departments or third party, I’m certain they would choose third party” Leah Wing, lecturer at the University of Massachussetts/Amherst(9), commented.

“There is a need for that, but as seen in Germany with ‘Trusted shops10’, traction is only being gained and we are not there yet”. Ivan Debnar from Slovakia added: “if I were an merchant, I would like to show I care about my client and there is need for first line support from within the company. This is also instrumental in building trust with one’s customers”. “It is indeed a two step-process,” Ivan Stefanko joined in, “first and foremost, there is customer care”, and next comes Online Dispute Resolution.

The beginning of a new era: VRM supersedes CRM

There is still a lot of evangelisation to do in order that the term ODR is known and the concept develops. Even some of our meeting attendees declared they had never heard the term before. By and large however, the future of e-commerce is no longer a matter of CRM but a matter of trust and respect, and the ability to resolve issues which are sometimes, unfortunately, ignored or minimised by merchants according to Pr. Ethan Katsh.

The empowerment of users and the maturation of e-commerce and especially cross-border ecommerce is calling for new standards where consumers will be able to manage their relationship with their vendors, in much the same way that vendors started managing their relationship with their consumers through CRM, twenty years or so ago.

This, is the beginning of a new era.

______footnotes

(1) Suffice it to say that I have been a fan of the Cluetrain manifesto from day one, and still am. I hold that text for one of the most significant marketing texts ever written. A lot of what Doc referred to during that meeting in terms of respect and trust has to be seen in the light of the manifesto.

(2) http://blogs.law.harvard.edu/doc/tag/do-not-track-no-track/

(3) https://www.respectnetwork.com/

(4) http://openidentityexchange.org/wp-content/uploads/2014/06/respect-trust-framework-v2.pdf

(5) http://searls.com/tsg/

(6) http://www.bbb.org/ Better Business Bureau

(7) http://odr.info/katsh

(8) https://en.wikipedia.org/wiki/Online_dispute_resolution#cite_ref-15

(9) https://polsci.umass.edu/profiles/wing_leah

(10) http://www.trustedshops.com/

Taking the Wraps off Product Packaging

Today’s selection is…

A selection of creative packaging with some very good and very innovative ideas. I have found out that just before going on vacation, rather than write yet another piece about the future of marketing or innovation, we would take some time off as and start browsing the Web a bit in search for ideas. That’s how I came across this photo mag list of “30 of the most creative and innovative product design you have ever seen“. Here are some other musings taken from my reading of that very good list of creative ideas:

  • innovation is not only in the product:  one can have a very trivial product like butter (photo) for instance and using innovative packaging change the customer experience; in essence, the same recipe could be applied to high-tech as well. You can very well take an ordinary online service and turn it into a superior customer experience through the way that it is packaged. Let’s take an example with the now defunct Posterous service, unfortunately bought and killed by Twitter. These guys were offering superior user experience through their innovative way of opening an account: with Posterous, you didn’t need to open an account at all. All you needed to do was to type a new URL (or send an email to a Posterous email address), and that would generate your account by default. You were then led to linking that account to an existing social media account and hey presto! you had bypassed the signup process entirely,

Taking the Wraps off Product Packaging

  • Some of these ideas are very innovative but also very unpractical: One of the lessons I derived from the reading of that piece, is that sometimes innovation can defeat is its own object. If we take this salami CD thing, I’m probably very thick but I still haven’t figured out whether it was a CD with a salami shape, or a piece of salami shaped like a CD. Okay, I must be lacking a sense of humour completely,

Taking the Wraps off Product Packaging

  • In some cases (Kleenex boxes) they have even managed to turn the product into a whole experience which makes you feel like collecting even the most trivial products like tissues. If you collect all the boxes then you will be able to rebuild the entire fruit. I found that extremely inventive and clever.

creative package design, innovative packaging ideas2

Here are some of my musings, I’m sure they are thousands of new ideas you can pick up from those beautiful and innovative photos. Enjoy!

30 of The Most Creative And Innovative Product Design You Have Ever Seen

When it comes to product design the packaging of the product play a very important role. A beautiful and creative product design greatly influences our decision while choosing one product over another. You may agree that several times you purchase a useless product because it was designed beautifully.

So a product design not only serves the purpose of informing the customers, but it should also appeal to your target market and impress the customer with its creativity and design. Below is our selection of 30 creative and innovative product packaging designs that will inspire you!

30 of The Most Creative And Innovative Product Design You Have Ever Seen – StumbleUpon.

Community Management needs to come of age … now!

Here is a new piece I published on the Community Management Appreciation Day blog yesterday. 

I have been on Twitter 7 years today. It seems like it was ages ago. In fact it was ages ago. When I started working in Internet banking in 1996, one used to say that Internet years were like dog years, that they were supposed to pass 7 times faster than real time, as it is believed to be true of animals. I don’t know the truth about canine mammals but Internet years are in fact more like light years than dog years. Yet, the faster it goes, the more things change and the more they stay the same.This Nietzchean proposition will probably sound overwrought to many, but, in fact, my current interactions with clients show that going back to basics is more than just an option. It’s a must have in this period of maturation of social media usage in the workplace, some 10 years or more after its inception.Let’s see why too many people are asking themselves the wrong questions and why rubbing salt on their wounds is of paramount importance.Focusing on the why, not the how!

via Community Management needs to come of age … now!.

Big Data: Back to Basics

Today’s selection is…

eye-largeBelgian expert Pierre Nicolas Schwab’s piece on Big Data based on his past assignments with companies trying to launch such initiatives.  When I discovered Pierre Nicolas’s prose,  I must admit that I felt better for discovering that the issue of “small data” is ubiquitous. According to him there are 3 common mistakes companies make when launching their big data initiatives:

  1. They don’t know where the data is (actually; I would add that sometimes they do but they are not allowed to use it. Very often a specific department owns the data and prevents anyone else from using it. This is mostly true of customer data, and I even witnessed that in small and medium firms, it’s not just a big logo issue),
  2. They don’t know what to do with their data: this too may seem ludicrous, but it’s true that big data requires both business/marketing and technical acumen, and it’s pretty easy for many to get drowned in data without knowing what to do with them,
  3. They’ve been told that IT is magical and you don’t need to do anything for systems will do it for you. Well, this is not true, massaging data requires a lot of work and dedication, trial and error, and also the fine tuning of data. In some cases (retail for instance), it is true though that a lot of data comes straight from check-out systems and not much needs to be done… except master data mining and very complex analytics, which often only data scientists can manage.

One last point I would add is often the poor quality of the data itself, mostly when it has been entered manually and rarely, if not never, updated properly. I have known someone who spent his entire company life updating customer databases for a large IT company, this is a never ending job… even though large databases exist, if you own the data, you need to keep it clean and up to date; this is a hug task.

How and why data analysis can help increase your profitability and fuel your growth – Marketing, customer satisfaction and loyalty

We are currently doing several big data-based assignments for very various clients and we’d like to share with you common mistakes that are often made by companies when considering analyzing their data.

Mistake #1: where is my data?

First of all what we see is that most companies have a HUGE problem finding their data. Either they don’t have collected data at all (which often is the case in retail environments and we know brands with a serious number of stores which, after having opened several sales points, realize they know nothing about their customers, the origin of their revenues, etc … they have no chance to monitor anything. Yet they don’t realize the opportunities they are missing and don’t take action.

via How and why data analysis can help increase your profitability and fuel your growth – Marketing, customer satisfaction and loyalty.