Where Everybody Knows Your Name: How to Succeed in the Post-Privacy Age

At Obama HQ, there's been a shift from voter participation (Yes We Can!) to voter targeting (We Know You). It's a sign of the times. "Getting to know you" is the new MO of big data businesses and campaigns.

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Clay Shirky, right; Don Tapscott, left/frog

Clay Shirky, a widely published authority on the Internet's effects on society, and Don Tapscott, an author and adjunct professor at the Rotman School of Management at the University of Toronto, are two of today's most sought-after thinkers on our networked world. Recently, they took the time to pose tough, timely questions to each other on how social media, intellectual property laws, and generational divides are affecting politics, business, and culture.

What follows is their written exchange taking place over the course of two months in late summer and early fall. Their interview will be published next week in design mind, a print magazine from the design and innovation firm, frog. Here is Part I of their conversation. We will run Part II on Sunday.

Clay Shirky: You've said that in the current Obama campaign, there has been a shift from driving for voter participation--"Yes We Can"--to voter targeting--"We Know You." What would you do differently if you ran the Obama campaign?

Don Tapscott: I'd return to the winning strategy of 2008. Obama broke new ground by using social media as a powerful political tool that let supporters organize themselves to create communities, raise money, and induce people to not only vote, but also to actively support the Obama campaign. There were 35,000 communities involving 13 million supporters. "Yes We Can" wasn't just a message of hope for the future; it was an assertion of collective power.

But this time, "Yes We Can" has been replaced by a new modus operandi for the Obama campaign. It's now "We Know You." The Democrats are investing heavily in Big Data to give them significant insights into the everyday behavior of each supporter.

This hurt him. Even deep into 2012, close to the election, fundraising was lagging. Young people in particular are alienated from a campaign that simply narrowcasts to them as passive individuals. And with youth not being involved, there is not only a crisis for the Obama campaign but also for the legitimacy of our political institutions in general. Obama needs to get past the advisors cautioning him to run a controlled campaign. They should encourage supporters to build communities around issues that they care about. Let go!

Shirky: More generally, businesses have always preferred targeting to collaboration in their relations with customers. What lessons are there for businesses in the tension between "Yes We Can" and "We Know You"?

Tapscott: Sure, Big Data, business intelligence, and next-generation analytics can help deliver more effective targeted communications to customers. And with detailed individual knowledge we can deliver better, personalized value (products and services) to them. But in many ways this is just fine-tuning of the old paradigm in marketing where companies deliver messages and value--one-way--to passive recipients. It's just an extension of the broadcasting model of marketing: Customers are inert, and the goal is a transaction and not a relationship.

The much bigger opportunity for businesses is to go beyond targeting customers to engaging with them: from customer centricity to customer co-creation; from focusing on customers to co-innovating with them; from mass customization to mass collaboration.

Companies need to be transparent to build trust and engagement. They need to launch and participate in customer communities and encourage customers to self-organize. And they need to craft business models that enable customers to share in the creation of value. If Threadless.com can do it, anyone can.

Shirky: You have called our times "The Age of Transparency," arguing that institutions are becoming naked and will have to get buff. Isn't this a threat to most?

Tapscott: Until recently, most institutions were opaque and operated secretly. With the Internet's arrival, this is no longer possible. People everywhere have at their fingertips the most powerful tool ever for finding out what's really going on and for informing others. Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management, and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge. Powerful institutional investors are developing X-ray vision. And in a world of instant communications, whistleblowers, inquisitive media, and Googling, citizens and communities routinely put firms under the microscope.

So to me it makes sense to embrace transparency, not just because it's inevitable, but also because it's good for you. I define transparency as the opportunity and obligation of institutions to provide pertinent information to stakeholders, like customers, employees, business partners, and shareholders--"pertinent" meaning it can help them if they have this information. Providing useless information is not being transparent.

Evidence suggests open institutions will perform better--and in many cases they already are. They will have higher trust and be able to build better networks. Transparency drops transaction costs and the error rate in supply chains. It increases the metabolism of collaboration and loyalty with employees. It helps organizations create good value--because value is evidenced like never before. And if your company is buff, you can "undress for success." Transparency is a new form of power, which pays off when harnessed.

So rather than fighting it, every company and government needs a transparency strategy. It has to rethink what information should be made available to each stakeholder class.

Presented by

 Frog Design is a global innovation firm. They work with companies to design and engineer meaningful products and services.

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