Not Necessarily the Usual Suspects: Users and Abusers of Global Resources

Just 90 companies have produced 66 percent of the world's total greenhouse gas emissions - and mostly in the last 25 years. 

The implication is that this is an eminently manageable problem: identify, measure and isolate the variables responsible for a situation, then address them.

But the data released in a new report does not, as usual, finger the usual institutions in the usual nations. In fact, it complicates matters by suggesting that the easy accusations and simplistic solutions based on traditional assumptions may no longer provide either the psychological comfort or the practical outcomes on which so many have depended for so long.

While the big energy and natural resource companies remain primary culprits and convenient targets, a number of government-owned enterprises in developing nations as well as wealthy western countries are apparently just as culpable. The point is not to cast blame so much as it is to reinforce the growing awareness that blame and responsibility are truly global, as uncomfortable as that knowledge may be. JL

Suzanne Goldenberg reports in Grist:

“There are all kinds of countries that have produced a tremendous amount of historical emissions that we do not normally talk about. We do not normally talk about Mexico or Poland or Venezuela. So then it’s not just rich versus poor, it is also producers versus consumers, and resource rich versus resource poor.”

Garbage In, Garbage Out: Computers Says No to Quant Hedge Funds

We do learn. Eventually. The challenge presented by all that big data and the big machines that manipulate it is that they are available to pretty much anyone with the wherewithal to buy them. Which, in an era of excess profits and income inequality, means there are lots of people with the means and the ambition to do so.

Now some might say this is what makes for a robust market. But anyone who has actually tried to make a buck knows that the ideal scenario is a market as tilted, unfair  and asymmetric as possible. Enterprises cherish their advantages and go to great lengths; not just to protect them, but to deny their benefits to others.

So when lots of really smart, really rich people start applying the same hardware and software to solving the same challenge - make me more money then the next guy - they quickly find that all those statistically significant conclusions tend to cancel each other out. The result is that no one is making much  more than their competitors, which can be bad for business when your primary selling point is how much better you are. And blaming the markets does not tend to score points with customers, either.

That, in short, is why situational awareness, interpretation and self-knowledge may be more valuable than all the algorithms in America. Or anywhere else. JL

The Economist reports:

IF SOMETHING has not worked for five years, most people would conclude that it was broken. Tell that to the geeks managing “quant” hedge funds, who craft elaborate algorithms to profit from market movements. Once money-spinners, their prized formulae have misfired since 2009, losing money in four of the past five years.

Training Is Essential in a Technologically Driven Economy: But Most Workers Aren't Gettting It

We take it for granted: walk into a new office with wifi galore, innovative lighting systems, sleep pods, automatic food or drink dispensers, sophisticated work stations. And we take it for granted. Of course all of this is here. It is my due.

What we may fail to consider, however, is who set this all up? Who installed all this stuff and made sure it works? Despite the expense and technological sophistication, we can guess that it probably wasnt someone with an undergraduate degree from Stanford or MIT.

There is hardly a good job in the western economies anymore that is not, at some level, based on an understanding of technology and electronics. Auto mechanics? Construction? Manufacturing? Or how about the military, with tens of thousands of high school graduates using complex devices as a natural part of their daily routine? Most so-called blue-collar work requires an advanced understanding of how this all works and, when necessary, what it takes to be repaired.

The problem is that the people most likely to be asked to assume those tasks are not receiving the training they need because of ideology and accounting conventions. The ideology is that training is someone else's responsibility and expense. The schools, perhaps? Though many are also lobbying to defund them. Or maybe the workers themselves? Despite the fact that stagnant household incomes makes that difficult if not impossible, assuming you want to eat occasionally and sleep under a roof. The accounting convention treats training as an expense rather than an investment, rendering it an obstacle to improving margins and bigger executive bonuses.

The challenge is that competitive economies depend on the people in need of this training if they are going to grow. We know from the work of Erik Brynjolsson and others that training is essential to capturing technology's potential productivity enhancements. Failure to train is simply an early indicator of failure, period. JL

Scott Clement and Jim Tankersley report in the Washington Post:

Lower-income workers -- the ones who most desperately need training to compete for better jobs -- are getting the least amount of training of anyone in the workforce, resulting in a dynamic that makes it harder to catch up.

Why Facebook Really Has To Care What Teens Think About It

Facebook swears teens still love it, despite an unguarded admission from its own Chief Financial Officer during a call to investors that there is some 'softness' in that demographic.

A lot of people would think, 'who cares?' teens dont have much money and are notoriously fickle.

The reality, however, is that advertising research suggests that attachments to brands are formed earlier rather than later in life. The concern among investors and marketers is that, as the following article explains, teens turned off to Facebook now may never return to it when they do have money as young adults, thus making the company a less reliable and efficient business platform. This might put it on a slower growth trajectory, rendering it less valuable as an investment.

This is an admittedly bleak scenario. It assumes that the company either does not recognize whatever the issues may be or is refusing to do anything about it, both of which appear to be both extremely self-defeating for a business attempting to position itself as a marketplace - and just plain wrong. The challenge the company now faces is two-fold: identifying and then fixing the source of the problem - and then convincing the rest of the world that it has done so. JL

Ryan Tate reports in Wired:

Facebook’s popularity with teens is important because young adult buyers are especially coveted by advertisers, and there’s a worry among some investors that if younger teenagers stop using the service in high school, they’ll use it less frequently in college, too. Fewer college users would mean less attention from 18- to 25-year-olds, who advertisers so want to reach. Less advertising to young people would turn Facebook from a growth machine into a slowing business for maturing people

Banks Need to Take On Google, PayPal and Friends - or Die

How we define an industry through the names and descriptions that become popular can be very instructive.

Banking and investment banking used to describe a well-defined if not always well-understood set of skills and outputs. Sometime in the waning decades of the 20th Century those legacies businesses morphed into something called financial services.

The traditional lines of demarcation established by professional interest and regulatory mandate began to blur. Everyone wanted to sell everything: loans, investments, mortgages...whatever someone would buy that had money as its core substance. The loosening of definition and oversight led to some predictable 'issues,' from which the global economy is still recovering five years on.

What we may be on the cusp of seeing, as the following article explains, is the latest iteration of this evolutionary process. Financial services is in the process of becoming the BIT industry: banking, information and technology. Because access to information and technology will define the future sustainability of the enterprises choosing to remain in - or enter it.

In the past, financial services professionals made a handsome living using information to which others did not have access. This 'information asymmetry' provided a decided advantage in reacting to or shaping markets. But it is becoming harder to keep those secrets inside the club. And for that matter, who gets club membership is no longer subject to professional or regulatory approval: anyone with the intelligence, strategy and funding can enter whenever and in whatever fashion they want.

The implication is that banks are going to have change. Instead of making money by denying customers information, they are going to make money by providing information. Not everyone will be able to manage that cultural and intellectual transition. But for those who do, the profits may be even greater than they were previously. JL

Francisco Gonzalez comments in the Financial Times:

Some bankers and analysts think that Google, Facebook, Amazon or the like will not fully enter a highly regulated, low-margin business such as banking. I disagree. What is more, I think banks that are not prepared for such new competitors face certain death.

Anger Games: Does Amazon's Drone Delivery Gambit Deflect Attention from Growing Workplace Criticism?

It's a very human communications strategy: when the conversation becomes uncomfortable, change the subject. 

At the height of the holiday shopping season, with Black Friday and Cyber Monday sales - however disappointing - topping the news, Amazon finds itself taking global criticism for its workplace practices.

Reports of relentless pressure and inhuman workloads at its fulfillment centers have reached such a scale that German workers are on strike and every self-respecting British news organization has an undercover investigator gathering data in an Amazon facility.

Analyses that my colleagues and I have done for clients demonstrate statistically that the impact of negative reporting can be offset by testing and then promoting other themes that deflect attention. Sometimes feel-good stories about CEO hobbies or employee contributions to charity can work. In Amazon's case, reversion to the world's favorite distraction - technology - appears to be doing the trick.

CEO Jeff Bezos, a master of the genre, went on the Charlie Rose Show. Mr. Rose is every executive's favorite interviewer: smart, knowledgeably inquisitive - and unfailingly polite. Mr. Bezos chose this carefully selected moment to announce package delivery by drone. Wow! went the media, just as predicted. Forget all those part-time minimum wage employees and think about dogfood drone drops. Or whatever. It worked.

There are, of course, numerous technological, legal, regulatory, national security and privacy issues to resolve. As one securities analyst put it in the article below, 'this could be a game changer - twenty years from now.'

Public discussion of this innovation has not yet focused on what it means for all those pesky employees: reduced reliance on human delivery people and, by extension, assuming other tech fixes are in the works, fewer people to complain about working conditions. The conversation has changed - and at a crucial juncture in the sales season. But the lingering question is whether the underlying strategic challenges have really been addressed - or just gamed. JL

David Streitfeld reports in the New York Times:

Beyond Amazon’s meteoric stock price, its capacity to bring more goodies to more people in less time, its ceaseless innovation, its ability to make other retailers look hapless — the company is enduring an unusual period of criticism. Its success is breeding anger.

Discipline and Process Confront Chaos: Liberating the Sales Machine in the Internet Era

If there is any part of the organizational hierarchy that has clung to a legacy of business regimentation in the face of the 'whatever, ethos' prevalent in the internet era it is sales.

Terms like 'discipline,' 'process' and - gasp! - 'control' are still bandied about like, well, when they were still reflected in actual outcomes.

But the 'net - and the availability of data - have created a new environment in which customers are no longer as dependent as they once were on the knowledge of the sales force. Now they are looking for a partner they trust to advise, not a high pressure spiel-meister. As the following article explains, this can work to the sellers' advantage, assuming they are cognizant of the change and willing to work with it rather than fight it.

The investment required to make the sale has gone up, so there is a benefit in better understanding about what the customer wants and then delivering it because it has become apparent they will pay more for what they want, which means getting to that point is better for everyone involved. JL

Brent Adamson, Matthew Dixon and Nicholas Toman comment in Harvard Business Review:

Sales has been caught off guard by a dramatic shift in customers’ buying behavior. Even as leadership has tightened compliance with the processes that have served so well, sales performance has grown increasingly erratic. Companies are reporting longer sales cycle times, lower conversion rates, less reliable forecasts, and compressed margins. The sales machine is stalling.