Advertising: Crowdsourcing Creativity For Competitive Advantage

The ad and PR industries are taking some of their own medicine. Perhaps having listened to their own client pitches about the value of social marketing, an insurgency of smaller creative ad shops have banded together to sell ideas and services, share the work and the profits.

It seems an idea whose time has come. While the big conglomerates control approximately 50% of the business, smaller firms have continuously hived off from the big ones, then been reacquired as the value of their concepts is recognized by clients. Given the industry's history of reconstituting itself in order to refresh its content and presentation, this should be easier than it has been in some other fields. However, there are also precedents in finance' pharma and other sectors where intelligence, creativity and sales ability are as important as scale. Whether the insurgent network hangs together or parts of it simply sell out to the highest bidder will be the next evolutionary step to watch. Sheila Shayon comments in Brand Channel:

"The clash of the agency Titans has come to a head, and the enemy is a group of small-to-medium sized creatives hungry for your business and more nimble than their iconic brethren — the big agencies that control at least 50% of the industry.

Blur Group, which bills itself (and clients) as a creative services exchange, has blurred the lines between Madison Avenue and client’s needs by creating a 10,000 strong network, or brokerage, for small and medium-sized ad and marketing agencies.

The up and comer was ranked by Forbes as third in its Top 25 Most Disruptive Companies list released in March, just behind Apple and Google.

Vetting its growing clout, GE’s healthcare unit used Blur for a video campaign. Briefs have come in from CNN, Harvey Nichols Group and Polo Ralph Lauren Corp. as Blur says it adds two new brand clients daily. No brief with a budget less than $1,000 is considered, and the largest so far was valued at $130,000. Blur takes a 20% percent commission on every deal.

It’s a battle over money, creative control, and power. “We are flattening out the creative services marketing space and giving it a much more rapid response and making it more cost effective,” Blur CEO Philip Letts told Bloomberg.

Shrinking Cities: Give Up or Design for Loss?

Urbanization is driving growth in developing countries. Beijing just announced that it now has 20 million residents, many of whom are internal immigrants from elsewhere in China. In the US and Europe, however, many cities are shrinking in population as deindustrialization and suburbanization weaken the ties to the urban core.

Cities are trying to cope with the impact of this hollowing out: lower tax rates, lower demand for services which entails layoffs of public sector employees many of whom live in the city, decaying housing stock, rising crime rates, among others. The challenge, as Amanda Bryan comments in Via Architecture (hat tip Greg Satell) is that giving up is not an option. Designing to the new reality may produce a more attractive, innovative and engaging community. The question is whether the will and the investment will be provided to make it work:

"Whether we’re comfortable with saying out loud or not, the American Dream is based on the idea of expansion and acquisition. First exemplified by the Louisiana Purchase, then modernized by the Interstate Highway Program, and now globalized by our corporate prosperity in countries around the world, we have gotten very good at dealing with growth. If there is one thing that Americans know how to do, it is expand, expand, expand (and yes, I know the same can be said of our waist lines). But do we know how to deal with the antithesis of expansion - shrinkage? To be specific, I’m talking about The Shrinking City, a phenomenon synonymous with the words suburbanization, deindustrialization, and decentralization.

While the issue of the Shrinking City is not unique to the United States, having found perch in old industrial belts like Eastern Germany and post-socialist regions of Russia, our Shrinking Cities are a little different because they are not the products of war, natural disaster, or governmental upheaval. The American Shrinking City is a once vibrant urban center, formerly dependent upon a highly industrialized local economy, which finds itself subject to a rapid population decline within its city boundaries and bloated with an excess of abandoned spaces and buildings.

If we look at the poster child of our nation’s car manufacturing industry, Detroit, we can see that its population has decreased more than 50% over the course of the last 60 years. According to the newest census report, this declining trend is still continuing with a population loss of 25% over just the last decade. The physical reality of this drastic population means that The City of Detroit is now facing the demolition of 10,000 empty residential buildings, 3,000 of which are slotted for demolition by the year’s end. The economic reality is an eroding tax base while the cultural implication is a culture of resignation that pervades the psyche of those left behind.

Where Do Owners of Discontinued Auto Brands Buy Their Next Car?

It appears that GM and Ford are having a tough time holding on to customers who owned brands they have discontinued. the problem is that brand affinities can be strong, particularly for emotional purchases like autos, so once spurned, owners feel free to look elsewhere and often like what they see.

Auto companies have a huge incentive to try to keep the previously loyal customers: repeat purchasers contribute significantly more value from a margin standpoint because they are less expensive to sell to. The companies are offering financial incentives and trying to make the owners of 'orphan' brands feel they still have a home at the parent company, but they are going to have to be more sophisticated in their appeals to values, old ties and the emotional strength of the corporate brand. So far, the financial deals do not seem to be working. Sharon Terlep reports in the Wall Street Journal:

"Tina Shaw and people like her are a big worry for General Motors Co. Three times before in the last seven years, the 35-year-old stay-at-home mom bought cars from GM's now-defunct Saturn division. But when she shopped for a new ride a few months ago, the Ft. Worth, Texas, resident didn't bother checking out any GM models.

"We were a Saturn family all the way, but we had to look at other options" after GM discontinued the brand, she said. Ms. Shaw paid $18,000 for a pearl-white Nissan Motor Co. Cube, describing the boxy little car as the closest thing to a Saturn she could find. "I probably wouldn't have considered another kind of GM vehicle."

Ms. Shaw is one of more than three million Americans who are driving vehicles produced by the three GM divisions that were shuttered in the auto maker's 2009 bankruptcy reorganization—Saturn, Pontiac and Hummer.

GM is racing to hold onto those customers. Early results, such as Ms. Shaw's purchase of a rival's small SVU, and similar defections among Ford Motor Co.'s Mercury owners, show the car makers' uphill struggle to retain former customers.

So far this year, about 70% of customers who traded in a Pontiac this year replaced their car with a non-GM model; with Saturn that number rises to 71%. Ford, which killed its Mercury division last year, isn't doing any better. About 65% of the Mercury owners who have bought new cars this year have defected to auto makers other than Ford. Saab, now a subsidiary of Spyker Cars NV, recently halted production while its parent looks for a cash infusion

Reputation Value: Is Personal Information the New Oil?

As social media entrepreneurs aggregate names and personal data in order to design, package and sell to them, questions are rising about the value of that information and who should capture it.

With HuffPost having been sued by some of its former unpaid contributors because of the sale price it received, the issue is no longer theoretical. Proponents of the personal value model say that companies can and should pay for access to the best potential customers. Others point out that consumers who provide personal info are doing so with the understanding that they are receiving valuable services in return, not the least of which is convenience. The reality is that some consumers, particularly those considered opinion leaders, may be able to derive some financial benefits but the vast majority will their returns in terms of added value services and promotions. Bianca Bosker reports in HuffPost (hat tip Leslie Gaines-Ross):

"Your personal information -- what sites you browse, what stuff you buy and what you do in your spare time -- is black gold, version 2.0.

So says Michael Fertik, CEO of Reputation.com, an online reputation manager, who calls users' online data the “new oil.”

Multibillion dollar industries, from search engines to social networking, have been built on the aggregation of personal data, information the World Economic Forum likens to a “new type of raw material … on par with capital and labor.” Companies are monetizing users’ clicks, status updates and emails -- so how about a cut for the users themselves?

According to Fertik, individuals should be able to charge companies to collect and use data about their online activity, which most sites currently acquire for free, then use to serve up targeted ads and other personalized content.

Though details on the technical specifics and feasibility such a plan are still quite slim, Fertik, an online-privacy proponent, suggests that the future could see the creation of digital personal data vaults that companies would have to pay to access. Users would, theoretically, be able to control who uses their personal information, and could also be compensated for allowing businesses to tap into their data.

Mobile Ad Funding Is Heating Up

Marketers are not yet certain about how the mobile ad market will benefit their brands. That has not stopped venture firms and tech companies from jumping into the market to try to capture what they hope will be a strong new channel.

There are some technical problems, such as websites not being properly aligned for the demands of mobile commerce. Marketers are also not yet sure how ads and promotions for the mobile market need to be different from the web or mainstream media, if at all. The question of whether mobile commerce will canibalize e-commerce and retail or whether it will enhance them has yet to be determined. There are also concerns being raised about the potential for abuse that could lead to an explosion of consumer debt, particularly by those least able to afford it. All of those concerns aside, the betting is that this is going to be huge. Ryan Kim reports in GigaOm:

"Mobile advertising currently generates just a fraction of the total revenue earned by online advertising. But it’s ramping up quickly and is poised to grow by more than 40 percent over the next several years, outpacing traditional online advertising. That’s helping fuel a spate of funding announcements and deals for mobile advertising companies as the competition in this space heats up.

The Interactive Advertising Bureau started reporting mobile advertising revenue for the first time, saying mobile ads brought in an estimated $550 to $650 million in the U.S. last year. Online advertising raked in a record $26 billion in 2010, eclipsing newspaper advertising revenue for the first time ever. Mobile advertising, while small, is expected to grow from $491 million in 2009 to $2.9 billion in 2014, according to BIA/Kelsey, a 43 percent compound annual growth rate. It’s that promise of rising growth that’s fueling optimism in the online advertising space.

Google is a major player with its AdMob acquisition and said last year its mobile advertising business was on a $1 billion run rate. Apple has also used its Quattro Wireless pick-up to introduce iAD. But there are plenty of other players in this space who are making moves, picking up money and getting bought up

Unemployment Benefits Help Families and Bolster the Economy: So Why Are Many States Cutting Them?

On its way to political compromise, logic sometimes trips over bureaucratic rules. There are several reasons for this development as Annie Lowrey reports in Slate. The first is that the financial relationship between states and the Federal government is bounded by rules, standards and trigger points. The disbursement of unemployment benefits can trip that trigger, with financial consequences for the state in question.

The larger issue, is political. Republicans have a moral aversion to helping those in need because it smacks of socialism to them. Aid to big business, does not raise this concern for them somehow, perhaps because they understand that 21st Century businesses are largely immune to the Biblical appeal to help others. More specifically, in the run-up to a Presidential election year, Republicans believe that the more voters are suffering economically, the worse it will be for Barack Obama and the better it will be for whoever their candidate turns out to be. However, recent polls suggest that voters are disappointed in the performance of the recently elected Congress, which is dominated by Republicans. So, this strategy may come back to haunt them in ways they did not anticipate. The battle of content and communications will play out for the next 18 months. It will important to watch which themes can gain traction against the background economic malaise:

"What should states do about unemployment insurance? May 6 morning's jobs report confirms for what feels like the thousandth month in a row that the U.S. economy is getting better, but from a very low trough and somewhat slowly. The economy added 244,000 jobs in April, the Bureau of Labor Statistics reported this morning. But the unemployment rate jumped up two-tenths of a percentage point, to 9.0 percent. The month saw the strongest job growth since 2006. But there were fewer people employed overall.

The report, then, will do little to change Americans' firm, and correct, conviction that the economy is still totally in the can. According to a CNN survey released today, about 80 percent of Americans say the economy is in poor shape. Only 1 percent—hedge fund managers and the serially confused, perhaps—say the economy is "very good." Unemployment remains the top concern. So why are governments across the country starting to kick the support out from under the chairs of the jobless?

It happened with barely anyone noticing. But, in the past few weeks, the unemployment-insurance system started shrinking back to its prerecessionary size. When the economy is growing, states provide a set number of weeks of insurance benefits to jobless workers. During recessions, the federal government tacks additional weeks on, given that finding work in a down-market is always especially hard. Right now, states provide up to 26 weeks of benefits, followed by 53 weeks of federal "emergency unemployment compensation" and 20 weeks of federal "extended benefits" in some high-unemployment states. It all adds up to a maximum of 99 weeks.

As recently as a few months ago, Democrats had fought to keep those generous, stimulative benefits in place when Republicans wanted to cut them. Why? The system is a safety net that keeps families' heads above water as the labor market recovers. (According to the Congressional Budget Office, federal unemployment insurance kept about 3.3 million people above the poverty line in 2009, for instance.) In December, President Obama cut a painful deal, stomaching an extension of the Bush tax cuts for the richest Americans in exchange for keeping federally extended benefits in place for the remainder of the year.

Can You Really Incubate the Next Big Thing?

The question behind the question here is whether genius can be identified, managed and grown or whether it has to be serendipitous. It's sort of a 'nature versus nurture' argument. The argument for nature is that the unforgiving environment weeds out the weak who are unlikely to survive anyway and thus contributes to more efficient allocation of capital, which benefits society. The nurture argument is that we have so much to gain from innovation that it is a waste to let some good ideas founder for lack of capital and other kinds of support.

In the tech sector, both have worked at various times and for different companies. Om Malik comments in GigaOm on hybrid concepts that are emerging to try to combine the benefits of the market with the advantages of venture-funded support systems:

"Now that we are smack in the middle of a technology up cycle, it isn’t really a surprise that we’re beginning to hear more and more about “incubators.” If you’ve been around the block as many times as I have, you may remember the sharp increase in such experiments about a decade ago. At that time, if a group offered free office space, bandwidth, other perks (including access to capital) and facilities, it was called an incubator. According to a Harvard Business School study, during the dot-com boom, there were 350 incubators.

As the dot-com boom progressed, “incubator” became a much-maligned term. Thus, the idea of a metacompany was born. It was a concept coined by Anil K. Gupta, then a visiting faculty member in the Stanford (University) Technology Ventures Program (and otherwise a professor of strategy and global e-business at the Robert H. Smith School of Business at the University of Maryland at College Park). I wrote about it in the November 2000 issue of Red Herring magazine:

It aggregates the key features of an incubator, a VC firm, and a diversified company. Like a corporation, a metacompany has a CEO and a corporate management team and maintains a significant, but less than 100 percent, ownership stake in a number of ventures, whether they remain closely held or later go public. But unlike VCs and incubators, metacompanies focus on a single area of business.

This morning when I read about Firestarter Labs, a new venture from Craig Walker, who was one of the co-founders of GrandCentral, the service that became Google Voice, I had a feeling of deja vu. In my article from 2000, I mentioned Comstellar Technologies, co-founded by telecom-industry veteran Sanjiv Ahuja (currently CEO of LightSquared, a wireless broadband company), as an example of such a metacompany. (Walker’s new venture, funded by Google Ventures, will focus on mobile.)

Like many companies and ideas born during more exuberant times, the concept of the metacompany didn’t work out. At the time, I thought it would. I even convinced my then-editor, Jason Pontin (now editor of MIT Technology Review) to let me write the story.

Like everyone else, I was caught in the optimism of a bubble and at that time almost anything seemed possible, and new business concepts were perfectly plausible. As I often say, in hindsight we are either geniuses or idiots. In this case I turned out to be an idiot. And frankly, I was naive and needed a decade of life kicking me in the butt to understand the difference between what’s essentially a cool idea and what’s a real business.

Preventing the Next Flash Crash: High Frequency Trading Regulation

Algorythmic trading is an innovation that cleverly employs technology to derive outsize profits from tiny movements in securities prices. The changes are so small and so fast that only a computer programmed to identify them can do so. The problem is that this has dramatically changed the nature of the capital markets, giving both institutional and small investors concerns about whether their trades can ever get a fair chance.

The big financial institutions have been resistent to increased regulation because they are the ones who have invested in and benefitted from this 'high freq' or algorythmic trading phenomenon. This is yet another example of how The Great Rebalancing, reflecting the change in the global economic competitive situation has changed since Europe and Asia began to recover from WWII, reducing the 30 year post-war US advantage. Trading and financial speculation are hallmarks of rentier societies in which production has diminished and the economy is increasing based on charging for access to the assets accrued while the economic advantage existed. Its presence is never a good sign for the future. Edward Kaufman and Carl Levin, former and current US Senators write in an op-ed piece in the New York Times about why stronger regulation is both necessary and beneficial to income and job growth:

"ONE year ago, the stock market took a brief and terrifying nose-dive. Almost a trillion dollars in wealth momentarily vanished. Shares in blue-chip companies were traded at absurdly low prices. High-frequency traders, who use computers to look for microscopic price differences in stocks on different exchanges and other trading venues, stopped trading, while others immediately sold whatever they bought, mainly to each other, in what has been called “hot potato” trading.

We haven’t had a repeat of last year’s “flash crash,” but algorithmic trading has caused mini-flash crashes since, and surveys suggest that most investors and analysts believe it’s only a matter of time before the Big One.

They’re right to be afraid. The top cop for our financial markets remains inexcusably blind to the activities of high-speed computer trading.

Web Quality Control: User-Generated Content An Issue for Demand Media

When the stories broke about Google tweaking its algorythms to penalize content farms, Demand Media was cited as a clear target. The strategic imperative for Google was to punish companies that could be seen as aggregators challenging Google's own status as the web's Uber-Aggregator.

Having just completed its own analysis, Demand's announcement about its response to the threat to its business (traffic down approximately 12% and profits down significantly)suggests that the quality of user-generated content may also have been an issue. This raises a larger question addressed in this space earlier; eg, does posting things on Twitter make you a journalist. The answer to that question was yes, but there is a qualifying issue. There does have to be a certain amount of quality in the writing and editing in order to attract an audience. John Letzing reports in the Wall Street Journal:

"Demand Media Inc. said it is shutting down a program for user-generated content on its eHow website and plans to commission longer, higher-quality feature articles and videos.

The website publisher, which focuses on short articles that it thinks will rank high in online searches, has come under fire for quality issues. Earlier this year, Google Inc. revamped its search-engine formula to weed out lower-quality sites.

Demand Media said some user-generated content will be removed from eHow, while other content will run through an editing and fact-checking process before being re-posted.

The company said it will also commission longer feature articles with more reporting for eHow and its other sites.

"This will have a positive impact," Demand Media Chief Executive Richard Rosenblatt said during a conference call Thursday to discuss quarterly results.

Mr. Rosenblatt acknowledged that two "major" search algorithm changes in February and April affected Demand Media's prominence online, resulting in a net decline in search-engine referrals for eHow of roughly 20%, and a 12% reduction in total page views.

Temper Your Enthusiasm: Marketers Rethink Social Media and Mobile Strategy, Realistic Audience Engagement Rules

As marketers learn more about what can effectively be done with social media and mobile apps, they have tempered their breathless enthusiasm and become more realistic about what works for which channels in which markets. This change was expected but the speed of the net may have reduced the time of the technology adoption cycle seen in previous eras. This may also be a result of the slightly improving economy, which has taken some of the pressure off marketers to deliver magical results and given them the breathing room to do the sober analysis required to make more informed judgments. The most significant development is that clients will get better advice and marketers will provide better returns as a result. Dave Rosenberg reports in CNet:

"Marketers have become more realistic about how to best engage their audiences, according to the results of a new IBM survey.

The State of Marketing 2011 report presented at a early May marketing event in Boston covered nearly 300 online and direct marketers across a wide range of industries, geographies, and company sizes. Results reveal that marketers have become more practical about their expectations for both mobile and social marketing, as well as the realization that their efforts are strongly tied to IT, especially when it comes to making marketing campaigns actionable for the end-user.

Will Pepsi's Social Vending Machines Transform Everyday Technology?

The technology is fascinating but the real excitement is around whether this will stimulate additional sales. Social commerce is more of a belief system than an economic reality. It is not surprising that an aggressively managed and forward-thinking company like Pepsi got the jump on this. Measurement of incremental sales via mobile records should be telling. the other benefit is the buzz it generates for employees and customers whose affinity for a brand that promotes edgy concepts may increase favorability which should translate into economic growth. Eric reports in BuzzStudy:

Last week Pepsi unveiled a prototype of a “social vending system,” branding it as the next generation in interactive vend technology. The machine features a touch-screen that allows users to buy a drink as well as gift one to someone. By entering the recipient’s name, mobile number and a personalized text message, the machine generates a code and instructions on how to redeem the beverage at another social vending machine

The announcement generated good buzz for Pepsi. The vending machines were mentioned in nearly 30% of all Pepsi conversations online last week.

People seem to like the idea. Sentiment around the Pepsi social vending machine is currently 73% positive. One of the hottest topics within the conversation was the ability to gift drinks, which was mentioned in nearly 20% of the conversations and was 95% positive.

Are computerized social vending machines the start of everyday technology becoming more social?

The In-Store Bar Code That Tells Your Mobile Phone How To Plant, Water and Fertilize

Retailers are capitalizing on the boom in mobile apps that give consumers more information while shopping. Home Depot, Lowe's and other big-box home stores are providing shoppers with information to help them make decisions about the most appropriate product for their home or garden.

Interestingly, they have started with plants. Mobile apps held to a bar code provide ratings, instructions on care, how-to advice and other information that is intended to make the shopper feel more confident about their purchase and therefore, more likely to buy. This marriage of technology, consumer psychology and retail strategy could be the wave of the future as merchants stop fearing that technology will steal sales from them. They will start employing it to enhance the sales experience. If introduced effectively, this could lead to improving sales and margins. Elizabeth Olsen reports in the New York Times:

"WHETHER it’s a piece of pipe or new kitchen cabinets, many Americans search for the right product in the aisles of home improvement stores like Home Depot or Lowe’s, trying to quickly identify what they need.

The big-box stores are introducing some help to provide customers with immediate information for their buying decisions. They are adding bar codes to certain products that give potential buyers on-the-spot access to product reviews and ratings, how-to guides and videos.

This will gradually expand across a greater range of products in the thousands of stores across the country as the huge home improvement retailers, which have been hit by the poor economy, seek to prompt consumers to undertake repairs or renovations they have been delaying.

For now, garden plants sold at Home Depot and Lowe’s have bar codes on each plant tag that enable customers with smartphone scanners to check out whether the plant, for example, grows in low light or needs frequent watering.

For Silicon Valley Start-Up Boom, Venture Funding For Consumer Services Growing Faster Than For Business Services

For venture capitalists, the future is clear and it is filled with consumer start-ups. Tech concepts tied to business are losing out in investment to the consumer-focused plans.

The growth in valuation of social media sites, games and smart-phone software dominate this round of tech boom investments. While the existing pool of capital targeted for business schemes is greater, the rate of growth for consumer is much higher and observers say the momentum has clearly shifted. The question now is whether the trend has already peaked. During the last boom the last VCs in did not realize the returns that their faster brethren did. While the rate of growth for consumer services is not necessarily a sign of a market top, it bears watching. Ben Worthen reports in the Wall Street Journal:

"Silicon Valley is in the midst of another start-up boom, but the money isn't flowing evenly to all newcomers.

Investors are piling into fast-growing websites like Facebook Inc., as well as makers of smartphone software, social-networking games and other consumer services. The same isn't true for technology start-ups targeting businesses, where the funding has been more muted.

The disparity is stark. In the first three months of this year, venture-capital investment in consumer tech companies nearly tripled to $874 million from $310 million a year earlier.

Meanwhile, investments in tech firms with business products rose at a slower rate to $2.3 billion from $1.9 billion a year earlier, according to research firm VentureSource. The overall pool of money raised by such companies is larger than that raised by their consumer-oriented counterparts because business-focused firms, which range from makers of networking gear to designers of computer chips, often require greater investments to get their ventures off the ground

Killing A Man Is One Thing, Killing An Idea Like Jihad Is Another

The cost to global security of this one man's obsessive hatred has been extraordinary. Now that he is gone, the question is how those opposed to terrorism as an idee-fixe can discredit and then stamp out that misguided legacy. In the end, the Bin Laden legacy has little to celebrate. Yes, he caused casualties, great cost and some inconvenience but not much of lasting value. No governments have fallen and the dream of an Islamic caliphate seems as unlikely as ever.

Marketing experts, particularly those who manage brands - and those who specialize in studying cults to discern characteristics that can be identifed and commercially replicated believe that ideas are like viruses. They need hosts to spread and there is a timeline to their existence. Bin Laden's death undercuts the myth of his superiority, but it is the faith he inspired that western and Middle Eastern governments must work to erase. The Arab Spring provides ample evidence that the host from which Bin Laden drew much of his sustenance is looking for other beliefs. That is a good host in which to implant faith in a less violent path to economic, political and personal success. The Economist comments:

"A FEW bullets were enough. But the shots that killed Osama bin Laden in the dead of night on May 2nd in a fortified compound not far from Islamabad came after 15 years of dogged pursuit, two long wars in Iraq and Afghanistan, well over $1 trillion of spending and around 150,000 deaths. It is a heavy reckoning for one man’s life.

Barack Obama, America’s president, will justifiably savour a moment so dearly bought. A reluctant warrior in other ways, he has not wavered in hunting down the foot soldiers and commanders of al-Qaeda as well as its elusive leader. The president chose a manned assault directly on Mr bin Laden rather than an air strike on his compound, as some of his advisers wished, and it paid off. Mr Obama was lucky, but he made his luck—and he deserves the credit that will now come his way (see Lexington).

Mr Obama has been careful to warn that violent Islamism is still a dangerous force. Al-Qaeda is active, even without Mr bin Laden (see article). The alarming problems of Pakistan, Yemen and so many other places threaten to feed more violence. And yet the death of the world’s most wanted man comes just when radical Islam looks vulnerable to the changes sweeping across the Middle East and north Africa. The task now facing all those who yearn for a safer world is to isolate Mr bin Laden’s savage jihad just as surely as its creator was isolated behind his compound walls.

How UPS Repackages Communications Messages for Multiple Channels

UPS has been a leader in figuring out how to blend the tidal wave of information it receives and puts out so that the insatiable demand for information about the company is met - on company terms.

The challenge for most businesses is figuring out how to determine which audiences are interested in which messages so that the company is filling the void consistently and without fear of internal contradiction. The lesson the company has learned is that focus on strategic themes, measurement and research, then plenty of repitition is what works best across traditional and new/digital media channels. Russell Working explains in Ragan.com:

"UPS tractor-trailer operator Ron "Big Dog" Sowder has traveled the highways for 49 years without an accident, and the company figured there was a lesson in his steady driving.

Every year UPS salutes drivers like Sowder who have gone at least 25 years without an accident, admitting them into its Circle of Honor. When another 1,122 drivers reached the milestone this year, the company localized press releases for the markets where they lived, mentioning him as well.

But UPS didn't leave it at that. The shipping and logistics giant repackaged the information for its own employees and the public, stressing safety. This was part of its effort to "repurpose" content and extend its reach, both internally and externally.

"We're trying to look also from the standpoint of content that is created; how can we use that through multiple channels?" says Susan Rosenberg, public relations manager for the Atlanta-based firm.

The Neurobiology of We: How Relationships Change the Brain

As scientists learn more about the brain they are finding that there are social and psychological influences that have an impact on the way the brain functions. The mind and the brain interact in ways that profoundly affect the way we act. Understanding these relationships and patterns will help science, business and government design programs, apply technology and communicate in ways that will increase effectiveness, productivity and perhaps even happiness. Patty de Llosa writes in Parabola:

"Did you ever wonder, somewhat apprehensively, whether your true inner Command Center rests in the complex bio­mechanics of your brain or the vast reaches of your mind? It always seemed to me as inscrutable as asking which came first, the chicken or the egg. But the study of neuroplasticity is changing the way scientists think about the mind/brain connection. While they’ve known for years that the brain is the physical substrate for the mind, the central mystery of neuroscience is how the mind influences the physical structure of the brain.

In the last few decades, thanks to PET and MRI imaging techniques, scientists can observe what’s actually going on in the brain while people sleep, work, make decisions, or attempt to function under limitations caused by illness, accident, or war.

The breakthrough in imaging techniques led Dr. Jeffrey Schwartz, now a research psychiatrist at the School of Medicine at the University of California at Los Angeles and author of The Mind & The Brain, to wonder two decades ago, “What kind of internal experience is generated by the neuronal activity captured on a brain scan? Even more important, how can we use scientific discoveries linking inner experience with brain function to effect constructive changes in everyday life?”

Dr. Daniel Siegel, founder of the emerging field of interpersonal neurobiology: How does the brain change as we influence each other? He has spent more than twenty years investigating the profound influence on us of those around us, or what he calls “the neurobiology of ‘we.’”5 Siegel is Clinical Professor of Psychiatry at the UCLA School of Medicine, co-director of the Mindful Awareness Research Center, and director of the Mindsight Institute. He’s convinced that the “we” connection is a little-understood, but powerful means for individual and societal transformation that should be taught in schools and churches, and even enter into politics.

“Interpersonal neurobiology isn’t a form of therapy,” he told me, “but a form of integrating a range of scientific research into a picture of the nature of human reality. It’s a phrase I invented to account for the human effort to understand truth. We can define the mind. We can define mental health. We can base everything on science, but I want to base it on all the sciences. We’re looking for what we call ‘consilience.’ If you think of the neuroscientist as a blind man looking at only one part of an elephant, we are trying to discover the ‘whole-elephant’ view of reality.”

Facebook Pays Viewers To Watch Ads: Desperate Ploy or Brilliant Tactic?

Probably more brilliant than desperate given Facebook's valuation, the increase in shadow stock price growth per additional advertising impact point makes this a very inexpensive way to add numbers and credibility. It also squarely addresses the concern that people dont want to see ads on Facebook. Given that viewers have to wade for free through oceans of baby portraits, group reunion shots and stupid-party-face photos, receiving ten cents for looking at an ad that probably at least has some decent production values doesnt seem like tough duty. Todd Wasserman reports on Mashable:

"Facebook on Thursday introduced a program that, in effect, offers consumers a financial incentive to watch ads on the site.

Facebook will now reward users who watch certain ads on the site with Facebook Credits, which can be redeemed to purchase goods on Facebook Deals, the company's new Groupon-like daily deals service.

The incentive, however, is not huge. Initially at least, the average ad will yield one credit, which is the equivalent of 10 cents.

The ads will mostly be in games. CrowdStar, Digital Chocolate and Zynga are among the participating game publishers. Facebook is working with Sharethrough, SocialVibe, Epic Media and SupersonicAds to serve ads on the program as well as TrialPay, which will provide analytics.

Does Posting Things on Twitter Make You A Journalist?

The growing debate about who is and who is not a journalist received a huge jolt Sunday night when the news of Osama Bin Laden's death was reported. Discussion, description and speculation exploded across the traditional media and the net.

The protagonists of 'citizen journalism' believe that the net has enabled people who do not make their living at traditional journalistics enterprises or through institutional means. Their belief is that this constitutes journalism in the digital age. Professional journalists (for want of a better phrase) and their defenders believe that there is a difference between their craft brother/sisterhood and those who simply Tweet or blog.

The truth, if there is such a thing in this debate, is murky. What seems unassaiblable is that people are getting their news and opinion from a variety of sources and dont seem much bothered by credentials. The economics of traditional media are dreadful due to this trend so jobs in traditional journalism are scarce. At the same time, applications to journalism graduate schools have never been higher. So, the answer appears to be that journalists are whoever they say they are. The market has spoken. Matthew Ingram comments in GigaOm:

"There’s been a lot of discussion about what the U.S. military strike on Osama bin Laden’s compound says about the state of the media today, and the latest debate is whether Sohaib Athar — the Pakistani resident who live-tweeted the raid — is a journalist or not. SF Weekly blogger Dan Mitchell is pretty convinced that he is not, but there are some pretty powerful arguments to be made that he is — that Athar represents a new kind of quasi-journalist, or what some call a “citizen journalist.” The bottom line is that journalism as we know it has been unbundled into its component parts, and virtually anyone has the ability to perform some or all of those functions now. We are still grappling with what that means, but it’s happening.

Mitchell seems particularly incensed that Steve Myers from the Poynter Institute refers to Athar — a computer programmer living in Abbottabad, whose Twitter handle is @ReallyVirtual — as a citizen journalist. Mitchell (whose bio notes he has worked for “nearly every media organization in the world” including Fortune, The New York Times and National Public Radio) says that “wondering on Twitter why there are helicopters flying around your neighborhood isn’t journalism.”

Algorythm Assigns 9/11 Memorial Name Placements Reflecting Bonds Between Victims

Technology and math can be tremendous forces for good. In the case of the 9/11 memorial, Linda Teschler reports in Fast Company about how the use of a powerful algorythm will permit co-workers, friends and relatives to listed in proximity. The designers felt that this more humanistic approach was in keeping with the emotion surrounding the event and its memory than simply alpahbetical listing. This is an innovative approach. Emotion is a powerful force in our society. Though often disregarded historically as a sign of weakness, its importance has been tapped by theologians, politicians and now, more than ever, marketers. It will be fascinating to see whether this influences the public response to the memorial and the way it is embraced by the families and others who feel such kinship with what occurred. :

"Instead of being listed simply alphabetically, the names at the 9/11 Memorial are listed to reflect friends and co-workers -- A juggling task that was possible only because of a powerful algorithm.

On that terrible morning, when American Airlines Flight 11 hit the North Tower of the World Trade Center, Victor Wald, 50, was working in his 84th floor office at the small brokerage firm, Avalon Partners. Like his colleagues, he raced for the exits, and scrambled down the stairs. But, having suffered from rheumatic fever as a child, he collapsed in exhaustion on the 53rd floor, as frantic workers from the building's upper floors hastily passed him by. Harry Ramos, 46, the head trader at the small investment bank, May Davis Group, who worked on the 87th floor, saw him on the stairs, and stopped.
They had never met, had no friends or relatives in common. But Ramos saw Wald and said, "I won't leave you." Ramos managed to coax Wald down to the 36th floor, where they sat together as the building collapsed

The Hidden Power of Renegade Knowledge

The gap can be quite wide between the approved way of proceeding in any organization and the way work or thinking really gets done. Thierry de Baillon comments in his blog on these 'gray behaviors' and their implications for identifying, acknowledging and responding to the demands of globally networked realities:

"From knowledge management to social business, nearly every framework or practical initiative tackling the human dimensions of organizational efficiency emphasizes knowledge sharing. Most of social tools and features’ justification is grounded in the simple assumption that openly and transparently sharing knowledge is the best way to help workers achieving their tasks. So far so good, unless knowledge doesn’t want to be shared.

Most of the tasks we are trying to achieve in our daily job are either complex or complicated. They involve multiple steps, human-to-human or human-to-machine interactions, use of different tools, all of which require following procedures, navigating through -and sometime despite- hierarchical requirements and validations, mobilizing resources whose availability isn’t aligned to your needs, producing some outcome for clients, either internal or external, whose logic isn’t yours, all of that in a reduced time frame. Whether we run a home-based business, are a public sector clerk or a Fortune 100 executive doesn’t make much difference here.

In my last post, I wrote about how people often develop “grey behaviors” in order to compensate for the lack of appropriateness between most business applications and the way the work is really done. Moreover, interactions between people is ridden with uncertainty, inappropriateness and fuzziness, even in a business context. We are human, after all. While modern organizations have developed enough processes, procedures and control structures to avoid black swans and mitigate unproductive mist, one of the main driver of efficiency remains the ticking clock

American Youth Unlikely To Achieve Parents' Living Standard: First Time For This Result in History of Gallup Poll

It has been an article of faith in America that the younger generation would achieve a higher living standard than their parents did. No longer. For the first time in the history of the Gallup poll surveying public attitudes about economic well-being, respondents say that today's youth will not be able to replicate, let alone surpass, their parents' lifestyle. The younger respondents were more optimistic than their parents, only one-third of whom held out hope for a better economic future for their children.

Some factors for this change in attitude are the result of "The Great Rebalancing," the impact of America's economic competitors like Germany, Japan and China finally reasserting their power after the 30 year recovery from WWII. But some are the result of Us government policies favoring business ownership in general and certain industries in particular at the expense of the balance of the populace. The question is whether poll respondents will summon the political will to change the conditions that have led to their diminished prospects. Amanda Fairbanks reports in HuffPost:

"For nearly three decades, pollsters have been asking, Will today’s youth have a better life than their parents’ generation?

According to a recent Gallup poll, for the first time in the history, a majority of Americans now believe that today’s youth will unlikely achieve the same standard of living as their parents.

Since 1983, polling organizations have posed the same question: “In America, each generation has tried to have a better life than their parents, with a better living standard, better homes, a better education, and so on. How likely do you think it is that today’s youth will have a better life than their parents — very likely, somewhat likely, somewhat unlikely, or very unlikely?”

In Gallup’s April poll, only 44 percent answered in the affirmative.

The survey broke down respondents according to age. While 57 percent of 18 to 29-year-olds thought today’s youth would have a better future than their parents, optimism waned as respondents got older. For instance, only 37 percent of those 65 and older shared the same sense of possibility.

China Bans Smoking: A Nation of 300 Million Smokers Ponders How Serious the Government Is

Starting Sunday, May 8, smoking will be banned in China inside and outside public places. Government attempts to mandate public behavior are frequently met with skepticism. The Chinese government, however, has an impressive record of making its regulatory diktats stick.

From the one child policy to curbing automobile ownership, China has often attempted to impose rules that are intended to benefit the public good, even if the public itself is resistant. Opposition carries a high price in China, but cigarettes have become central to the business/government ethos. They are a common form of gift giving and central to the social milieu around deal making as well as the vagaries of daily interaction. The smoking ban in the US has worked relatively well. Whether a nation this large can stamp out the habit will be a massive study in behavior modification. Benjamin Haas reports in the Los Angeles Times:

"Efforts to ban smoking in public places here have been plagued by false starts and failed campaigns. China, with the world's largest population, also has the most smokers — more than 300 million — a deeply entrenched smoking culture and little awareness among the general public about the health risks.

The current ban was mandated by the State Council, China's top administrative body, in response to a World Health Organization treaty Beijing signed in 2006 pledging to enact nationwide tobacco-control legislation within five years. China already has missed the deadline by almost five months.

The law mandates a penalty of 30,000 yuan, or about $4,600, for owners of establishments that do not comply, but it is still unclear who will enforce the ban and what actions will trigger such a steep fine.

Why Commodity Prices Are Collapsing - And Why It Matters

The rise in commodity prices over the past two years has been ascribed to various causes, most frequently to the rapid economic growth of China and India. However, recent analysis has begun to suggest that much of this run-up is being driven by financial trading and speculation tied to the central bank support of large financial institutions who believe this to be a more profitable activity than lending to business. The market has spoken, with acquiescence from Washington, London and the rest of Europe, but as Yves Smith comments in the Naked Capitalism blog, this is not a sign of good health. This is an indication that the failed reforms of the last two years have recreated the conditions that led to the last financial crisis and appear destined to lead to the next one, as well:

"The commodities runup and the fixation on inflation looked like a rerun of spring 2008: a liquidity-fueled hunt for inflation hedges when the deflationary undertow was stronger. That observation is now looking to be accurate.

But what may prove different this time is the speed of the reversal. With investors acting as if Uncle Ben would ever and always protect their backs, markets moved into the widely discussed “risk on-risk off” trade, a degree of investment synchronization never before seen. All correlations moving to one historically was the sign of a market downdraft, not speculative froth. And as we are seeing, that means the correlation will likely be similarly high in what would normally be a reversal, and that in turn increases the odds that it can amplify quickly into something more serious.

The only way to stem this unhealthy pattern of cross market connection is structural measures, meaning measures to reduce the tight coupling of financial markets which allows developments in one market to propagate quickly to seemingly not so closely related markets. But we are a long way away from seeing the authorities consider, much the less act, to stem the free flow of capital, which has long been depicted as virtuous. The work of Carmen Reinhart and Kenneth Rogoff on financial crises shows the reverse, that high levels of international capital flows are strongly correlated with larger and more severe implosions. But we may have to test the current system to destruction before we can develop the will to fix it.

"Torture Did Not Provide Useful, Meaningful or Trustworthy Information "

Some politicians and members of the US security community are attempting to claim that early US efforts to extract information from captives by 'waterboarding' and other 'extreme interrogation' methods (they refrain from using the word torture) led to the identification of Osama Bin Laden's whereabouts and his ultimate demise. As this brief article from Barry Ritholtz points out, that is simply wrong on the facts. As in most matters of diplomatic, business and military process, honest assessment of what works and what doesnt is far more important to ultimate success than ideology or dogma:

"Why does getting this right matter? Why is it so important to deal with reality and not some ideology not based on real information, data, and human behavior?

Creating a false premise as to a cause or major factor in a societal event ultimately leads to the wrong policy decisions being made on the basis of bad information.

Thinking that torture is wrong is not a liberal or conservative value — it is an American value.

Why the Next MBA Your Company Hires From A US Business School Will Probably Be a Chinese Woman

So many Chinese women are applying to and being accepted by US business schools that it is driving up the overall percentage of women MBA candidates. The ambition to get ahead and the long history of Chinese students seeking graduate degrees in the US are contributing factors. But China's one child policy means that family's are willing to put their resources behind any child who shows promise without regard to gender. In addition, Chinese companies anxious to compete will hire the best talent available. China is free - or somewhat freer - from the historical legacy that favored men over women in business because their business tradition only goes back to 1978. The net effect is a generation of formidable competitors who may well mold the next generation of business management. Alison Damast reports in Business Week:

"Gail Hu first considered an MBA degree in the U.S. while a student at Fudan University in Shanghai. After three years as a bank trader, she entered the Stanford Graduate School of Business to gain international exposure so that she can help Chinese companies grow.

"I'll have an edge," Hu, 26, said in an interview.

Hu is part of a wave of women from China, Taiwan, and Vietnam pursuing U.S. MBAs, and their numbers are driving up the overall number of women in such programs, according to the Graduate Management Admission Council, the Reston (Va.)-based group that administers the GMAT test for business school applicants. Last year, a record 105,900 women took the exam, or 40 percent of all test takers. Women now outnumber men in East Asia taking the test, according to a council report.

"Countries are investing more intensively in women, and business schools are making efforts to make it easier for women to think about their programs," said Michelle Sparkman-Renz, GMAC's director of research communications. "That really continues to turn the spigot so that more and more women are coming through the pipeline."

The Ereader Exits: Buggy Whip Comes To Mind As Multifunction Tabs Take Over

Kiss your Kindle and Nook good-bye. Consumers are increasingly opting for multifunctionality. Tablet prices are coming down and as the Flip camera's demise makes clear, consumers want to carry less hardware with more power. Though the tablet, particularly the iPad, has a reputation for costliness, the tech adaption cycle is already at work and prices are coming down. The big question is where this is heading. The tab is too big to be a phone and the phone is too small to serve the tab and laptop functions. Is there a convergent technology that will project functionality in a way that makes either the smallish phone or the large-ish hardware obsolete altogether? That is the next frontier. Amy Lee reports in HuffPost:

"The ereader's days are numbered.

Though 6 million ereaders were sold in 2010, experts predict it is all downhill from here for these devices, which will be edged out by the growing number of increasingly affordable tablets on the market.

By 2015, twice as many people will own tablets as do ereaders. By the end of 2012, the number of people owning tablets will overtake the number of those owning ereaders, according to research by Forrester, a tech research company.

As the demise of the Flip camera suggests, consumers are increasingly trading single-purpose devices for multifunction gadgets. Especially as the price of tablet computers continues to fall, experts predict users will drop ereaders for tablet PCs that offer web-browsing and video capabilities alongside ebooks. Even Amazon, which helped make ereaders and ebooks mainstream, appears to recognize the ereader’s impending demise and is rumored to be developing its own tablet device. The Barnes and Noble Nook Color has already been modified to run Android’s Froyo software, taking it into tablet territory.

'Birther' Numbers Plummet Following Obama Certificate Release: Belief Systems Bow To Information Systems?

In business, it is a commonplace that belief systems are more powerful than information systems. However, in a surprising development, recent polls show that President Obama's release of his long-form birth certificate have cut the number of self-described birthers - those who questioned whether the President was born in the US - by half.

Some might question why the President did not release this information two years ago when the issue first arose, but he may well have been employed tactical advantage by waiting until his reelection year so that the announcement would have the maximum impact in bolstering his credibility and undermining that of his detractors. Jon Terbush reports in TPM:

"Following the release of President Obama's long-form birth certificate -- a document skeptics claimed did not exist because Obama was supposedly born in a foreign country -- the percentage of Americans who doubt Obama's citizenship has plummeted, according to two new polls.

In a Washington Post/ABC News poll released Thursday, only 10% of Americans said Obama was born in a foreign country. That's exactly half the percent who said the same last year.

And even among those who doubted Obama's citizenship, far fewer are quite so confident in that stance now that Obama's birth certificate has been released. Last year, nine percent of respondents said there was "solid evidence" to prove that Obama was born elsewhere. That number dropped to just one percent in the latest poll.

The biggest change came among Republicans, as 14% now say Obama was born outside America, down 17 points from last April when 31% of GOPers said the same thing. A PPP poll released earlier this week found a similar drop in the percentage of Republicans who believe Obama was born outside the U.S.

The Tupperware Party Moves to Social Media: Now Let's See What Happens To Sales

If ever there were a product and a process that was tailor-made for social media, it is the venerable Tupperware Party. The original networking event might well have been the Tupperware sales event. The company has belatedly decided to focus considerable attention and investment on driving sales through this new channel. It will require some realignment of its incentives and operations, but the market is there. The question is now how the company executes. The longevity of the concept and its sustained popularity lead one to assume this will only add to the company's growth. However, other retailers have stumbled over issues such as delivery, customer expectations, returns and other elements of the cost/value analysis. However, supporting the company's existing sale force with a social media presence may turn out to be the greatest advantage of this strategy. Stuart Elliott reports in the New York Times on the company's preparations and expectations:

"LOOKED at a certain way, the venerable Tupperware party could be deemed an early form of social networking or word-of-mouth marketing. Now, the Tupperware parent is making a big bet on the contemporary, digital equivalents.

Brands Corporation plans to significantly increase its presence in social media like Facebook and Twitter, which more consumers are using as ways to connect with marketers as well as one another.

The goal is to find “more disruptive methods” to dispel perceptions that “we are your mother’s Tupperware,” said Rick Goings, chairman and chief executive of Tupperware Brands in Orlando, Fla., as the company seeks more consumers to buy — and sell — its products like containers, cutlery and cookware

Emotional Miscue: Business Schools Teaching Leadership Skills Beyond Number-Crunching

Business schools are learning that accounting and other number-crunching skills are necessary but not sufficient to get their graduates into the powerful C-suite leadership jobs that are the hallmark of business success. To remedy what many see as MBAs' abject failure to communicate, collaborate and manage others laterally, B-schools are increasingly requiring courses that emphasize the kind of interpersonal skills global corporations say their executives need. The schools have offered these courses in the past, but many doubted the value. No longer.

With most Global 500 countries generating the bulk of their sales and profits outside their home markets it is increasingly important that managers understand how to operate in different cultural milieu. The rise of the internet and particularly of social media has pierced the permeability of the corporate boundary, giving those outside the company a voice - not always welcome - a say in strategic initiatives. The schools hope this will make their graduates more marketable - and more successful over time. Melissa Korn and Joe Light report in the Wall Street Journal:

"Business schools are tapping into their "soft" side.

This fall, students at Columbia Business School will be invited to learn the art of meditation. Emotions will run high in Stanford Graduate School of Business' long-running "Touchy Feely" course. And professors at the University of California at Berkeley's Haas School of Business will try to teach students to rein in their type-A personalities, lest they upset fellow classmates.

It's all part of a continuing push by business schools to teach "soft skills"—such as accepting feedback with grace and speaking respectfully to subordinates—that companies say are most important in molding future business leaders.

Although business schools have traditionally excelled at teaching "hard skills" like finance and accounting, those skills become less relevant as an employee ascends the corporate ladder and moves away from crunching numbers to overseeing employees, companies and experts say.

Customer Cluelessness: Research Shows Companies "Don't Know What They Don't Know"

A new study of customer service shows that a majority of companies think they do a good job of serving their customers while a majority of customers think just the opposite.

How do such gaps occur? According to the Accenture report, companies make inconsisent use of data and analytics and are inclined to give themselves the benefit of the doubt, even when they have data showing that they should not do so. The challenge is a 'get-along, go-along' corporate culture that even in a relentlessly competitive era rewards internal loyalty. Companies unwilling to identify the difference between perception and reality when it comes to customer needs and wants are inviting targets for their competitors. The answer for corporate managers is to reward honest analysis even if leadership's decisions are called into question. Those who are unwilling to do so may find they are no longer leaders. 4-Traders reports(hat tip Bernard Marr):

"When asked to evaluate how well they are using analytics, such as applying data, statistical and quantitative analysis, descriptive and predictive models to drive decisions and enhance customer experience, most organizations' perceptions are very different from reality, according to new research from Accenture (NYSE: ACN).

Accenture's Customer Analytics Survey of 800 directors and senior managers at blue chip organizations in Brazil, China, Germany, Italy, Japan, Spain, United Kingdom & Ireland and the US and Canada showed that more than half (55 percent) of respondents felt their methods for segmenting customers and providing relevant experiences are either "ideal" or "very good." However, related consumer research tells a different story. Accenture's Global Consumer Survey[i] found that only 21 percent of consumers believe the companies they do business with are good at providing a tailored, relevant experience. Further, it showed that two out of three consumers changed service providers in the past year. With an average cross-industry churn (or defection) rate of 64 percent, organizations that hope to grow must provide more relevant and satisfactory customer experiences.

Most Organizations Don't Know What They Don't Know

The Customer Analytics research revealed that more than half of the organizations surveyed do not take advantage of analytics to help them target, service or interact with customers. This suggests that many organizations may be unaware of what is really important to customers and lack the capability to measure their performance in engaging with them.

Glass Ceiling on Board Membership Hasn't Cracked For Women or Minorities

Release of Fortune magazine's annual Fortune 500 issue is always the occasion for analysis and debate about business trends. One that does not appear to be changing much is the ethnic, racial and gender make-up of corporate boards. Sheila Shayon reports in Brand Channel that white men still predominate, holding approximately 73% of such positions. This suggests that despite the rhetoric and interest group pressure, the cultural affinities that govern corporate goverance decisions are still driven by familiarity and personal comfort. Until businesses are convinced there is a business reason to change (either positive, like the potential to enter lucrative new markets, or negative, like the threat of lost business due to threats) this is unlikely to change:

"The proverbial glass ceiling is still firmly in corporate America, as men continue their dominance in the private sector.

Women and minorities are still underrepresented on U.S. corporate boards according to the recent report, “Missing Pieces: Women and Minorities on Fortune 500 Boards — 2010 Alliance for Board Diversity Census.”

“Missing Pieces shows that, six years after the first Alliance for Board Diversity (ABD) Census, not much has changed. While research points decisively to the benefits of a diverse boardroom— including enhanced financial performance—white men continue to dominate corporate boards and have, in fact, increased their presence since 2004. Women and minorities are still vastly underrepresented."

“Six years after the first ABD Census, not much has changed. White men continue to dominate corporate boards and have, in fact, increased their presence since 2004, commented Ilene Lang, CEO, of research firm Catalyst and chairman of the alliance, to Bloomberg.

Collective Intelligence: Can Networks Be Smart - and Made Smarter?

Collaboration, cooperation, networks, alliances, groups and alliances have been touted variously as the optimal future source of knowledge, wisdom, sales and profits. Considerable research has been conducted into the value of networks (to pick one manifestation of the phenomenon). While it may be too early to assume anything definitive, the general impression, with many caveats, is that value is added by employing networks achieve varied forms of economic success. A logical extension of this theory is that networks have a collective intelligence that can be managed. In other words, one can make one's network more productive. Recent research suggests that one aspect of this is true: networks do have a collective intelligence which can be modified. Megan Garber reports in the Nieman Journalism Lab (hat tip Thierry de Baillon):

"Do groups have genetic structures? If so, can they be modified?

Those are two central questions for Thomas Malone, a professor of management and an expert in organizational structure and group intelligence at MIT’s Sloan School of Management. In a talk this week at IBM’s Center for Social Software, Malone explained the insights he’s gained through his research and as the director of the MIT Center for Collective Intelligence, which he launched in 2006 in part to determine how collective intelligence might be harnessed to tackle problems — climate change, poverty, crime — that are generally too complex to be solved by any one expert or group. In his talk, Malone discussed the “genetic” makeup of collective intelligence, teasing out the design differences between, as he put it, “individuals, collectively, and a collective of individuals.”

The smart group
First is the question of whether general cognitive ability — what we think of, when it comes to individuals, as “intelligence” — actually exists for groups. (Spoiler: it does.) Malone and his colleagues, fellow MIT researchers Sandy Pentland and Nada Hashmi, Carnegie Mellon’s Anita Williams Woolley, and Union College’s Christopher Chabris, assembled 192 groups — groups of two to five people each, with 699 subjects in all — and assigned to them various cognitive tasks: planning a shopping trip for a shared house, sharing typing assignments in Google Docs, tackling Raven’s Matrices as a group, brainstorming different uses for a brick. (For you social science nerds, the team chose those assignments based on Joe McGrath‘s taxonomy of group tasks.) Against the results of those assignments, the researchers compared the results of the participants’ individual intelligence tests, as well as the varying qualities of the group, from the easily quantifiable (participants’ gender) to the less so (participants’ general happiness).

And what they found is telling. “The average intelligence of the people in the group and the maximum intelligence of the people in the group doesn’t predict group intelligence,” Malone said. Which is to say: “Just getting a lot of smart people in a group does not necessarily make a smart group.” Furthermore, the researchers found, group intelligence is also only moderately correlated with qualities you’d think would be pretty crucial when it comes to group dynamics — things like group cohesion, satisfaction, “psychological safety,” and motivation. It’s not just that a happy group or a close-knit group or an enthusiastic group doesn’t necessarily equal a smart group; it’s also that those psychological elements have only some effect on groups’ ability to solve problems together.

So how do you engineer groups that can problem-solve effectively? First of all, seed them with, basically, caring people. Group intelligence is correlated, Malone and his colleagues found, with the average social sensitivity — the openness, and receptiveness, to others — of a group’s constituents. The emotional intelligence of group members, in other words, serves the cognitive intelligence of the group overall. And this means that — wait for it — groups with more women tend to be smarter than groups with more men. (As Malone put it: “More females, more intelligence.”) That’s largely mediated by the researchers’ social sensitivity findings: Women tend to be more socially sensitive than men — per Science! — which means that, overall, more women = more emotional intelligence = more group intelligence.

Obama's Osama Bounce: On Second Thought, It's Not Just the Economy, Stupid

The early analysis of Bin Laden's death on Obama's election chances was mixed: the conventional wisdom was that he would benefit, which he did (to the extent of a 9% increase in job approval) but that it would not last. However, the commentary about the impact has been so negative, that knowledgable analysts like Nate Silver, who comments in the New York Times' 538 blog, have come around to the view that observers are dramatically underestimating the positive impact. Though Obama's numbers on handling the economy have continued their decline, this revisionist analysis says that killing Bin Laden was an epochal event that will have some lasting impact:

"When I first heard the news about the American military operation that killed Osama bin Laden, I was pretty certain that the popular press was going to overstate its impact on Barack Obama’s re-election chances. I wrote an article to that effect last night.

After reading the reactions today, though, I’m not certain that some analysts aren’t underestimating the impact instead.

Jonathan Chait of The New Republic says the political ramifications of killing Osama bin Laden will be “minimal to nonexistant.” Jamelle Bouieof The American Prospect argues that Bin Laden’s death “does nothing to change the basic facts of Obama’s political situation.” Kevin Drum of Mother Jones doubts that Mr. Obama’s re-election prospects have been improved. (All of these are liberal or center-left commentators, by the way.)

It’s true that the effect of the news is very difficult to quantify. Is killing Bin Laden akin to the capture of Saddam Hussein, which caused a relatively small and short-lived jump in George W. Bush’s approval ratings? That probably understates the case: Osama bin Laden did orders-of-magnitude more damage to America than Saddam did. But is it tantamount to achieving victory in a war? It’s not that either, exactly: Bin Laden is just a single (very) high-value target in what United States policymakers describe as a global campaign against terrorism.

Just because something is difficult to model, though, doesn’t mean that we should ignore it. Political science research has generally found, instead, that foreign policy does matter

Brazil Between Rock of Inflation and Hard Place of Export Decline

Siemens chief Brazilian executive has warned the country faces deindustrialization if it continues to pursue a strong currency to curb inflation. At the same time, its booming economy has revived fears of the hyperinflation that plagued the country for much of the late 20th century. What is a BRIC to do? Keep walking that fine line, appears to be the only sensible answer. Ultimately, business threats to move elsewhere seem hollow given the size and power of Brazil's agricultural and energy industries.Furthermore, its growing relationship with China promises some buffering for the bumpy transition period. Samantha Pearson reports in the Financial Times:

"Brazil faces the risk of “deindustrialisation” unless it imposes more extreme capital controls to rein in the surging local currency, the head of Siemens in the country has warned.

Adilson Antonio Primo, the Siemens chief executive for Brazil, told the Financial Times that the strong real was crushing the group’s export business in the country.

Siemens, the German industrial group that ranks as Brazil’s biggest electronics conglomerate, now only exports some 12 per cent of its products made in the country compared with 20 per cent four years ago.

“We need wider measures, harsher measures. If the currency strengthens beyond 1.50 [per dollar], that would be a real disaster for us,” Mr Primo said.

“We’re not advocating protectionism, but you need to be able to compete on equal terms. This is fundamental; there is a risk of deindustrialisation.”

The real has soared about 50 per cent against the dollar since the start of 2009, making exports less competitive and encouraging a flood of cheap imports, mainly from Asia. It was trading at about 1.584 to the dollar by midday in Brazil.

TV Newscasts Seek To Find Their Way In the Digital Age

The changing of the guard in US TV news anchor positions, traditionally the premier assignment in television reporting, signals that the networks are struggling to figure out what works in a multi-channel world. Viewers are getting an increasing amount of news, opinion and information online. The historical image of a sonorous voice eminating from a mature white male face may no longer be compelling enough to drive viewership on any of the various media which are now available. But no one is sure. Sam Schechner reports in the Wall Street Journal how the television networks are experimenting with formats, story choices and timing to extend their reach. One must conclude, inevitably, that the mass market for news has fractured. Different people want - and expect - choice. Whether that can be provided in a scalable and profitable manner is the challenge:

"Longtime CBS reporter Scott Pelley will become anchor of the network's nightly newscast on June 6, the latest shift as broadcasters wrestle with how to extend the lifespan of the graying evening-news format.

CBS Corp. said Tuesday that Mr. Pelley, who has been a "60 Minutes" correspondent since 2004, will be taking over from Katie Couric, who is ending a five-year run as anchor of "CBS Evening News."

Ms. Couric was brought in to reinvent the broadcast through more interviews and analysis but returned to a more traditional newscast after ratings took a hit. She is now looking to start a daytime program, according to people familiar with her plans.

CBS's move sets the stage for a new round of jockeying among networks over the dwindling evening-news audience—and the ad dollars associated with it. But the battlefield has shifted. Rather than embracing sweeping changes, as CBS did initially with Ms. Couric, executives at all three networks are moving more incrementally to adapt to the digital era.

National Security Strategy Debate: 'Dominance, Like Fossil Fuel, Is Not Sustainable'

the death of Osama Bin Laden has raised a number of questions about the foundations and direction of national security strategy. Should the US stay in Afghanistan? Should it pursue the war on terror? What are the national interests in a world in which so much commerce is conducted and wealth managed online? And, what is sustainable given the economic realities of material scarcity, particularly in the energy field? Jim Dwyer reports in the New York Times on the debate within the US military on where we go from here:

"Here’s a proposition: The death of Osama bin Laden brings a moment to talk about something other than threats — not because they don’t exist, but because for the country to see and speak of nothing else is mortally dangerous.

Col. Mark Mykleby, a senior advisor on strategy to the chairman of the Joint Chiefs of Staff, and Capt. Wayne Porter of the Navy wrote a paper calling on the United States to focus on social policies, education and sustainability.

So listen for a moment to two military strategists, working at the highest level of government, as they turn to the subject of leaky air-conditioners in government buildings in New York. “Poorly fitted air-conditioners cost New York City 130 to 180 million dollars a year in extra energy consumption,” one of the strategists, Capt. Wayne Porter of the Navy, said Tuesday. “They generate 370,525 extra tons of carbon dioxide.”

"Suppose, he says, you fixed them. And then you got the 40 states that waste the most electricity to match the 10 most efficient. The likely benefits are no surprise — less foreign oil, cost savings, job creation, decreased pollution.

Now follow that thread to “A National Strategic Narrative,” a paper written by Captain Porter and Col. Mark Mykleby of the Marines, which calls on the United States to see that it cannot continue to engage the world primarily with military force, but must do so as a nation powered by the strength of its educational system, social policies, international development and diplomacy, and its commitment to sustainable practices in energy and agriculture.

Mobile Wallet Pay-by-Phone Scheme Dialed Back

A consortium of mobile carriers including ATT and Verizon who were hoping to capture a fat slice of the mobile payments business have had to scale back, acknowledging the power of the credit card companies in this realm. The implication for consumers is that the prospects of competition that might have led to lower costs are now dashed. Given the insatiable demand for higher fees and profits from the bank-owned credit card industry, consumers can expect mobile transactions to be costly. It will be interesting to see whether this slows the growth of mobile payments or changes the nature of the business, possibly driving it to higher end products and services. Robin Sidel and Shayndi Raice report in the Wall Street Journal:

"The biggest U.S. wireless carriers are scaling back a joint venture for mobile payments that they originally hoped would compete with Visa Inc. and MasterCard Inc., reaffirming the traditional credit card companies' clout in the nascent market for mobile transactions.

The venture known as Isis, formed by AT&T Inc., Verizon Wireless and T-Mobile USA, initially aspired to set up its own payments network and collect fees on every transaction. Customers would maintain accounts directly with their wireless carrier, rather than with a credit card company.

Now, the group has adopted the less ambitious goal of setting up a "mobile wallet" that can store and exchange the account information on a users' existing Visa, MasterCard or other card, people familiar with the matter said. The carriers are scrambling to find other ways to make money from the transactions.

To get as many users as possible, the carriers are now in talks with Visa and MasterCard to have them participate in the system they will embed in phones, people familiar with the matter said.

An IP Address Is Not A Person

This would be amusing if it werent so serious. The US Supreme Court has ruled that a corporation is a person, in terms of various of its rights under US law. Other governments have accorded 'Nature' (eg, the environment) person status. Given the amount of creativity and hubris found in the tech community it was inevitable that someone would find demand similar status for an online persona or the representation thereof. This ruling may limit this for the time being but it is unlikely to reappear in other forms. Torrent Freak reports:

"A possible landmark ruling in one of the mass-BitTorrent lawsuits in the U.S. may spell the end of the “pay-up-or-else-schemes” that have targeted over 100,000 Internet users in the last year. District Court Judge Harold Baker has denied a copyright holder the right to subpoena the ISPs of alleged copyright infringers, because an IP-address does not equal a person.

In the last year various copyright holders have sued well over 100,000 alleged file-sharers in the United States alone. The purpose of these lawsuits is to obtain the personal details of the alleged infringers, and use this information to negotiate a settlement offer ranging from a few hundred to a few thousand dollars.

Lawyers, the public and consumer advocacy groups have compared these practices to extortion, but nonetheless new cases are still being filed every month.

How Much Would Customers Pay For Superior Service? American Express Says 13% More

Previous surveys support the claim that consumers will pay more for what they perceive as superior service. The challenge is addressing he perception that the service is truly superior. But if that impression can be created, the economic benefits are manifested in enhanced customer loyalty, higher margins and greater market share. Kimberly Weisul in BNet:

"How much is great customer service worth? About 13 percent, according to a recent survey from American Express. That survey found that about 70 percent of Americans said they would pay 13 percent more for a product or service if it came with superior customer service.

That 13 percent premium is the second-highest of the ten countries covered by the survey. In India, people said they were willing to pay a the biggest premium-22 percent-for better service. Shoppers in other countries-Australia, Canada, Mexico, U.K. France, Italy, Germany and Netherlands-were willing to pay between 7 and 12 percent more.

Chinese Social Gaming Market To Hit $5.8 Billion in 2011

Kiss that image good-bye of China as a low-cost producer of pedestrian products and a consumer of cheap trinkets. As Dean Takahashi reports in Venture Beat, online gaming is exploding. The implication is that the market for ecommerce is growing apace. This means that western companies looking to expand in China simply must develop a strategy that aligns traditional marketing tactics with online efforts:

"The Chinese game industry is expected to grow 21 percent to $5.8 billion in 2011, thanks to continued growth of the social game market, according to a new report by market researcher Niko Partners.

Lisa Cosmas Hanson, managing partner at Niko Partners, said in an interview that China’s online game market grew 34 percent in 2010 to $4.8 billion. That was more than expected, since China’s social game market grew a lot faster than expected.

By 2015, the market is expected to grow to $11.1 billion, said Cosmas Hanson, who conducts exhaustive surveys in the Chinese market and has been covering Chinese games for nine years. Cosmas Hanson said that she expects the market to grow at double digit percentage rates for the foreseeable future

Is There A Business Class On the 'Net For News?

People pay extra to fly, to ride trains, to go to the movies, for hotels and a host of other premium services. To most, the cost is less important than the value promised for the better experience. Matthew Ingram comments in GigaOm on why this model has been so difficult to manage in the media business - but why that may be changing:

In their ongoing struggle to get readers to pay for content, some media companies have implemented paywalls, while others have hitched their wagon to Apple’s app store and are trying a subscription model. But what if, instead of trying to charge everyone for the same content, publishers could come up with something similar to what business class achieves for airline passengers: a premium experience. Would people pay for that? Design agency Information Architects thinks they would — but the problem for news companies is that others are already busy creating that experience.

The design agency — which is headquartered in Zurich, Switzerland and Tokyo, Japan — has worked for some of the world’s leading newspapers, including Ziet Online in Germany, and also created the Writer application for the iPad. In a recent blog post, co-founder Oliver Reichenstein described a conversation with the CEO of a large publishing company about revenue-generating strategies for newspapers and other content companies. Reichenstein made the point that:

The main currency of news sites is attention and not dollars and that I believe that it is his job, as a publisher, to turn that attention into money to keep the attention machine running.
The CEO agreed, and said that he had been thinking about how to do that, but didn’t see paywalls as the answer. Then he came up with the “business class” analogy:

Why do people fly Business Class? In the end, an airplane brings me to the same place regardless of whether I fly Economy or Business Class and the massive price-increase I pay doesn’t compare the difference in value.

Social CRM (Customer Relationship Management) Is Just CRM, So Get On With It

As a community of interest we appear to spend far more time trying to explain why social media is different and better than we do trying to figure out how to incorporate it so that it becomes invisible, seamless and effective. Frederic Gilbert blogs at Customers First about how this applies to customers and the management thereof(hat tip Thierry de Baillon:

"Social CRM is about integrating the customer's voice, and the interactions from social media, into your Customer Relationship Management framework. CRM is first about managing relationships to develop business! Nothing more! What do I mean? Social media is another great opportunity to engage customers through a new touch point, to establish a durable relationship, and to offer relevant and "right on time" value proposition to your customers. The company needs to capitalize on this data to propose solutions that are in answer to a customer’s expectations. A golden way is to simply the process and let the customer create the value proposition and have the company as its ally to provide the solution. However, one must not forget that social media has its own ways, rules, and habits that cannot always be transferred in real life.

Do you imagine yourself "poking" a future customer that has added you as a friend on FaceBook? I'm sure my customers would love to be poked and would gladly comment on my pictures. This means that social media should not be considered as a different approach of the relationship! It is simply a tool used to propose alternatives to enhance customer loyalty and to get his feedback in order to improve your services! Our specialists have demonstrated too many biased proofs and it is about time that we leverage Social Media for true business use.

Crunching the Data of Love

It stands to reason that as algorythm-driven data mining becomes more sophisticated - and the type of data that delivers the best results gets more specific - that analysts will be able to do a better job of producing solutions. And so why not matching the love-lorn? Match.com has a notable success rate and it turns out that it is not just happenstance. Devin Leonard comments in Business Week

"Two years ago, Mark Guilarte signed up with Match.com in search of female companionship. He was emphatic about his hair-color preference. The 26-year-old flight instructor from Arizona wanted a brunette. "I'm very picky," he says. "I knew what I was looking for."

Then Match.com recommended Carmen Lopez, a 25-year-old blonde, who was a housing manager with a military contractor and ... bingo. They were married in February. Carmen finds it strange that the nation's online personals service seemed to understand that she and her husband were meant for each other regardless of his hair-color preference. "I've always wondered, 'How the hell did they know?'" Carmen says. "Excuse my language."

The Guilartes can thank Amarnath Thombre, Match.com's vice-president of strategy and the keeper of the site's matching algorithm. Thombre, 38, seems ill suited to play Cupid. He is a dour quant with engineering degrees from the Indian Institute of Technology and the University of Arizona. Before he joined Match.com in 2008, he worked at i2 Technologies, a supply-chain software company. Thombre says the technology that helps people fall in love isn't so different from the kind that enables companies to whisk goods from warehouses to store shelves. "In both situations, you are trying to optimize data," he says with a shrug.

Luxury Brands Revamping Their Strategies: Demanding More Control Over All Elements of the Sale Process

Luxury brands are trying to leverage their prominence - and their margins -to gain more of a marketing advantage at the point of sale. With consumers acquiring more information on the net and through their mobiles, - and vice versa, the luxury segment understands that the time is now to gain more control over image and pricing. The broader implication is that the social/mobile revolution is moving information in new ways that allow everyone in the value chain to seek their optimal position, whether customer, retailer or producer. Rachel Dodes and Christina Passariello report in the Wall Street Journal:

"As the luxury market rebounds, powerful global brands including Gucci, Prada and Dior are starting to press for more control over the way their products are presented and sold in U.S. department stores.

The goal is to chip away at the old sales model used for decades by American department stores and instead operate a store-within-a-store, known as a "concession." Rather than simply sell their products to retailers, which then resell them to shoppers, more design houses want to rent space in the department store and operate relatively independently. They hire their own staffers, call the shots on what to carry and, critically, determine the depth and timing of markdowns.

Indeed, markdowns are one of the reasons design houses prefer to operate concessions. Several brands were furious at American retailers for being quick to slash prices during the recession. In 2008, some retailers cut prices by 70% even before Thanksgiving, discounts so deep that brands feared they would cause consumers to question the value of pricey luxury goods

Chinese Investment Could Bypass US

China and the US continue to stagger towards accomodation. National pride, hard feelings, divided leadership sentiments as well as military and economic imperatives make for a less than tranquil process. Now that China has accumulated sufficient capital, its potential as an investor is driving national governments to seek largesse. Due to their size and competitiveness, however, such Chinese funds may not find their way to the US. David Barboza reports in the New York Times:

"For three decades, wealthy nations have invested hundreds of billions of dollars in China, helping drive one of the most remarkable economic booms in history.

Now, China is poised to return the investment favor. The question is whether the United States will be willing and able to fully participate, according to a new study to be released Thursday.

Flush with capital from its enormous trade surpluses and armed with the world’s largest foreign exchange reserves, China has begun spreading its newfound riches to every corner of the world — whether copper mines in Africa, iron ore facilities in Australia or even a gas shale project in the heart of Texas.

The study, commissioned by the Asia Society in New York and the Woodrow Wilson Center for International Scholars in Washington, forecasts that over the next decade China could invest as much as $2 trillion in overseas companies, plants or property, money that could help reinvigorate growth in the United States and Europe.

But the report, to be released at a Washington news conference that Commerce Secretary Gary Locke plans to attend, also warns that the United States risks missing out on a large share of the Chinese investment boom because of politics, a growing rivalry between the two nations and deep-seated perceptions that Chinese investments are unwelcome in America

Augmented Reality: Why Smartphones Can See More Than We Can

As our lives become more technologically dependent - and more mobile - innovations that enhance the power of the experience and its execution become more common. Katherine Boehret explains in the Wall Street Journal about the growing power of smartphones to identify and interpet the world around us:

"If you're tired of looking at the world through the same lens all the time, try adding a few virtual objects.

This week, rather than do my usual product testing, I decided to offer a peek into one of the most exciting trends in technology: augmented reality. AR, as it's commonly known, is about as close to magic as we can get without visiting Hogwarts School of Witchcraft and Wizardry.

Not to be confused with virtual reality, which substitutes a simulated world for the real thing, AR takes a live view of the real world and/or a real object and adds computer-generated graphics or sounds that appear as if they're right in the scene. The resulting visual can look convincing enough that people reach out and try to touch the AR object.

Built for AR
Most smartphones are now built with the technological requirements for AR—including a camera, accelerometer, compass and GPS—so developers are quickly building AR apps that take advantage of these devices. The technology started showing up in apps in 2009, and now hundreds of them use AR.

AR games add objects to real-life places and scenes, like ghosts in Ogmento Inc.'s Paranormal Activity: Sanctuary that appear as if they're on the actual street that people are on, viewed through the people's iPhones.

Viewdle's Social Camera uses AR for social networking as it identifies people in photos by comparing their images to tagged photos of friends in Facebook. Google Goggles uses image recognition to provide information about real-life objects including books, artwork, wine and menus, which can be translated into a language you can read.

AR: It's All Around You
You may not realize it, but basic forms of AR are at work in our everyday lives. Some cars, like the 7-series BMW, offer heads-up displays that impose data onto the windshield of the car so drivers don't have to glance down to read things like current speed.

Armchair quarterbacks appreciate AR every time they see the National Football League's first-down yellow line, visible only to the television audience. And some sporting events now include advertisements that appear on TV as if they're painted on a field or basketball court.

Physical Object Attraction
Each of the developers with whom I spoke about AR's future agreed: Computer vision is the central element to creating AR apps.

Computer vision describes a device's ability to see, meaning it can recognize an object, extract information from that object and do something with that information.

Does Revenge Serve An Evolutionary Purpose?

The Osama Bin Laden killing has stimulated a range of emotions around the world. In the US, in particular, a sense of grim satisfaction - and sometimes of glee - has been evident. It turns out that revenge is a deeply embedded human instinct that has implications for group and individual behavior. Katherine Harmon interviews University of Miami Professor of Evolution and Human Behavior Michael McCullough:

Spontaneous patriotic chants and flag-waving crowds were sparked by word that Osama bin Laden had been killed earlier this week. Despite the man's loathed reputation as the mastermind of the September 11 terrorist attacks, the jubilation over bin Laden's death raises the question: Why the celebration? Was it relief, a sense of justice—or the simple pleasure of revenge?

As draconian as lethal retribution might seem, science has shown that the human brain can take pleasure in certain kinds of revenge. Magnetic resonance imaging (MRI) scans have revealed that thinking about revenge activates the reward center—where the feel-good neurotransmitter dopamine is lodged—in much the same way that sweet foods or even drugs can.

But the news also brought out some more jumbled sentiments, including sadness for the reminder of the past tragedy and ambivalence about the intentional killing of another person. With all of this gray area—colored in this instance by politics, history and the sheer scale of the international stage—is there a way to understand revenge in a basic, biological way?

To find out, Scientific American spoke with Michael McCullough, a psychology professor and director of the Evolution and Human Behavior Laboratory at the University of Miami, as well as the author of Beyond Revenge: The Evolution of the Forgiveness Instinct (Jossey-Bass, 2008). He explains that the impulse for revenge evolved as a simple cost-benefit equation and why it is best served cold—but not too cold.