April 2009 Archives

The Internet is a key source of information for millions around the globe.  Not surprising therefore that search engines, like Google are one of the first places people turn to for information on topics ranging from movies (Slum Dog Millionaire), overnight sensations (Susan Boyle), and threatening pandemics (swine flu).

A team of researchers from Google and the CDC answer this question in a most compelling and topical way in the February issue of Nature.  The authors were able to accurately model the outbreak of flu epidemics by tracking search engine query data.  Their research tool, Google Flu Trends, has a warm intuitive basis to it - people are more likely to be searching for sunscreen during summer months and for flu remedies and prevention tips during the flu season.

The research team observed that some search queries tend to be popular exactly when the flu season is in full swing.  A few examples:

• flu complications, syptoms
• cold/flu remedy
• antibiotic/antiviral medication

By observing and counting the frequency of these search queries the authors are able to accurately estimate how much flu is circulating in various regions of the United States. 

The CDC also tracks influenza across the United States through their Influenza Sentinel Program, which relies on a network of approximately 2500 doctors who see 16 million patients each year. The doctors keep track of and report the percentage of their patients who have an influenza-like illness (ILI).

The CDC publishes national and regional data from these surveillance systems on a weekly basis, typically with a 1-2-week reporting lag.  In an attempt to provide faster detection innovative surveillance systems using indirect signals of flu and flu-like activity like call center volume and sale of OTC drugs have been adopted recently. 

While the CDC innovations are laudable, it is difficult to top the value of Google search queries as an early warning system for epidemics and pandemics.  They can be counted automatically, quickly, results can be made available daily, and can be consistently published 1-2 weeks ahead of CDC ILI surveillance reports.

Early detection and rapid response are not just mantras for the commercial world.  They are just as important in the worlds of institutional and government action.  With over 90 million adults searching online for information about specific diseases or medical problems each year in USA alone, web search queries are an important line of defense for preventing and containing epidemics, before they become a pandemic.

It is in that spirit, that after conferring with US and Mexican health officials Google Flu Trends has created and released experimental flu activity estimates for Mexico based on aggregated search data.  With the WHO raising the alert level concerning swine flue twice in the last three days, elevating it to one notch below a full-scale pandemic, all available data needs to be brought into play, regardless of whether its been validated against actual flu cases or not.

 

During difficult times like this, with the financial gloom still hanging heavy and swine flu threatening, it is encouraging to find social media being used to promote social well being, not just the goals of a few corporations with the right technology.

Web search logs, whether generated by Google or some other search engine, represent the collective intelligence of millions of Internet search users. We already have an example of how its being used intelligently for the early detection of influenza.  Perhaps it can also be used to tease out early signals of a much-needed economic recovery! 

What digital crumbs should we be looking for - search for air-fares, travel and holiday destinations, home prices, marriages and honeymoons?  

"One word is too often profaned..."

The poet Shelley was of course talking about love!

The word innovation, while undoubtedly more prosaic, could soon be wearing that tag, if we are not careful.  The current practice of labeling anything new as an innovation, maybe acceptable literally, but leaves a lot to be desired if we are to capture both the body and soul of the word - not merely something new, but also creating incremental value and welfare for some segment of society.  

I have been thinking about this issue for some time now.  The trigger was Akerlof and Shiller's excellent book Animal Spirits and Gillian Tett's FT article Lost through destructive creation.  Both are truly impressive pieces, but I was uncomfortable with the usage of the word innovation to discuss financial products and practices that had heaped unprecedented ruin on millions of people around the globe.  It led me to start a dialogue with some of my academic and corporate collaborators on when is an innovation not an innovation?

Federal Reserve Chairman Ben Bernanke's address in Washington on April 17 on Innovative Financial Services for the Underserved was the nudge we needed to stop discussing and start writing.  In his speech, Bernanke admitted that financial innovations can misfire, but appealed for regulation not to prevent innovation.  Rather, he recommended, that regulation should ensure that innovations are sufficiently transparent and understandable to allow consumer choice to drive good market outcomes. 

Not everything new creates incremental value!  So, back to the key question - what characteristics of innovation best capture its literal meaning and its economic soul? 

In a single sentence: an innovation is not an innovation, when it produces snake oil!  More formally, for an innovation to capture and reflect both its body (literal meaning - new) and soul (economic meaning - incremental value) it needs to pass the following litmus tests.

Is the innovation creating a valued asset?

Is there mutuality of benefits?

Is the process of value creation transparent?

Is the innovation simple to understand?

Do claims and puffery totally overshadow substance?

The word innovation is more than just a label.  Greater understanding is required of its essence as a key driver of economic prosperity.  Hopefully, this will lead to more discipline in its usage.  The word innovation is a merit badge and not every new product or service is worthy of it.

What do you make of the following?

• Protests in front of luxurious homes of AIG executives in USA
• Windows at the Royal Bank of Scotland smashed during the recently concluded G20 summit in London
• 3M and Caterpillar executives held by angry employees in France for several hours before being released

Not exactly the second coming of the French Revolution, but definitely a telling tale of our times!  Three different countries, three different events, same message; two key stakeholders, employees and customers, are crying out loud and clear - it's not fair!

The sentiment on the street is clear - the dice is loaded in favor of the self- interest of companies and their senior executives; employees and customers are getting the short end of the stick.  

What does this have to do with value, innovation, and growth?  A lot, if you consider the role that perceived fairness plays in influencing economic well being.

Fairness is one of three key factors Akerlof and Shiller focus on in their insightful book on how human psychology drives economic cycles.  Concerns of  fairness - whether the prices companies charging for their products are fair, whether the credit terms being offered by credit card manufacturers are fair, whether health care insurance policies are fair - have the potential to override rational economic motivation.

Still not convinced? Have you heard of Julius Harper?  He's a video-game producer in Los Angeles, not a celebrity, who achieved temporary celebrity status (NBC Nightly News, etc.) by spearheading a drive against Facebook's new Terms of Service, which stated - We Can Do Anything We Want With Your Content, Forever.

According to the previous terms, Facebook's rights to original content uploaded by registered users remained valid only for the duration of the life of the account.  The rights expired when an account was closed.  Not anymore. Now, anything a user uploads to Facebook can be used by the company in any way it deems fit, forever.

Harper didn't think these new Terms were fair!

In fact, he thought - this is bull-crap.  So what did he do?  With a few clicks of his mouse, he created a protest group - People Against the New Terms of Service. The net result - the movement got support, it got the media attention, and yes it got Facebook's attention.  Its important to keep in mind that it was the perceived unfairness of the situation that triggered the action.  The Internet, the connectedness, the collaboration were all enablers, not the reasons for driving behavior.  

So, at a time, when the perception of fairness between companies and consumers is at an all time low, it is eerie to observe how few companies, consultants, and business gurus are treating it as a priority item to fuel recovery from the current slump and drive future growth.

A new equilibrium of fairness is essential if companies want to jump-start their recovery and if they want to sustain it.  In the absence of this new equilibrium companies may experience temporary short-term gains but no real long-term success.    

This new equilibrium of fairness can be achieved only if companies are willing to invest in developing new vectors of value for new/existing sets of customers.  Merely exercising greater marketing muscle, and relying on pushing tired company agendas on customers crying - "it's not fair" - is not the right prescription for long-term well being.

Several good role models exist:

• The Tata Nano, a people's car, launched on March 23, represents a very different vector of value for a different set of customers, best expressed in Ratan Tata's own words:

"I observed families riding on two-wheelers - the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family. We are happy to present the People's Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility."  

• Nokia too is creating a different vector of values for a different set of customers with Nokia Life Tools:

The goal of Nokia Life Tools is to inform, involve, empower and help bridge the digital divide in emerging markets; these tools will focus on Agriculture information and Education services with Entertainment supplementing the offering.

• By reengineering the twin concepts of credit and loans, Grameen Bank has created numerous value vectors for entirely new markets in areas ranging from fisheries to solar energy.

Opportunities for creating different vectors of value for a different set of customers abound in a number of areas, such as digital journalism, hospitality, casual and fancy dining, medicine, education, energy, peer-to-peer lending, and transportation, to name a few.  All that we need now is companies with both the will and the vision to innovate and develop new handshakes with the market.

Fairness is not just a feel-good, sound-good word or academic concept.  It's a real and significant driver of your customer's willingness to do business with your company.

And shouldn't that be the goal of every business?