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But this time, "Yes We Can" has been replaced by a new modus operandi for the Obama campaign.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.

Shirky: You recently asked, "Is privacy an outmoded idea in the digital age?" A question like that doesn't seem to have a simple yes-or-no answer. How should we approach the question in an era when so many old assumptions about privacy are changing?

Tapscott: This is a complex topic. For sure our attitudes about privacy are changing. I find myself sharing all kinds of information--largely because the benefits to me outweigh the costs. When we reveal personal information we can help society too. Every time a gay person comes out, or someone with depression opens up about their condition, they break down stigma and prejudice. Fully 20 percent of all patients with the fatal disease ALS (amyotrophic lateral sclerosis, or Lou Gehrig's disease) share intimate information about their treatments and conditions on the network PatientsLikeMe.com. And tens of thousands of others with rare diseases who use the site to share information say it has helped them better manage their illness.

But this doesn't mean that privacy is an outmoded idea. Rather, it's worth defending.

To me, privacy is nothing if not the freedom to be let alone, to experiment and to make mistakes, to forget and to start anew, to act according to conscience, and to be free from the oppressive scrutiny and opinions of others.

But today we are collectively creating, storing, and communicating information at nearly exponential rates of growth. Most of this data is personally identifiable, and third parties control much of it. Practical obscurity--the basis for privacy norms throughout history--is in danger.

The fundamental problem with the case of radical personal openness is that we are a long way from a world where being an open book will not hurt us. There is the injury to individuals that arises from unauthorized disclosure of sensitive personal information, but tangible harms and damages can also occur, too, such as from blackmail, identity fraud, impersonation, and cyber-stalkers.

As for governments, I think the advocates of "personal openness" are naïve, thinking that governments are always benevolent toward their citizens. In fact, likely the future will not look like Orwell's 1984 or Jeremy Bentham's panopticon prison, or an Eastern bloc police state during the Cold War. Those are metaphors from another era that depended upon a single, all-knowing malevolent power seeking control. The more appropriate metaphor for the growing loss of privacy today would be Frank Kafka's The Trial, where the central character awaits trial and judgment from an inscrutable bureaucracy for a crime that he is not told about, using evidence that is never revealed to him, in a process that is equally random and inscrutable. Similarly, we could become the targets of social engineering, decisions and discrimination. And we will never really know what, or why.

"Transparency, even radical transparency, is an opportunity and responsibility for companies, governments, and other institutions. But the new movement toward 'personal sharing' is naïve and misguided. Transparency applies fundamentally to institutions, not to individuals."

Corporate profiling, data mining, and Big Data also have a dark side. Do we comprehend the implications of a world where corporations have near perfect information about each of us? Knowledge is power. Could firms go beyond fairly influencing us, to being able to manipulate us or cause qualitatively greater dangerous consumer behavior in society?

On a more fundamental level, privacy is essential to human relationships, as strong ties arise from sharing secrets and forging information symmetries. Privacy is even a foundation of the formation and maintenance of the self and of how we manage our reputations. Irving Goffman's seminal 1959 text "The Presentation of Self in Everyday Life" needs an update. Personal information is the stuff that makes up our modern identity and is the foundation of our personal security. It must be managed responsibly--not just by others, but also by each of us.

I've argued for many years that transparency, even radical transparency, is an opportunity and responsibility for companies, governments, and other institutions. But the new movement toward "personal sharing" is naïve and misguided. Transparency applies fundamentally to institutions, not to individuals.

Rather than living our lives out loud, we each need a personal privacy strategy governing what information we release and to whom. Rather than default to openness, we should default to privacy, and then choose to share information when the benefits outweigh the dangers.

Shirky: You've written so much about the different ways young people see the world, having grown up with the affordances of the Internet and mobile phones. Given the enormity of the gap in attitudes and behaviors between people as close in age as people in their late 20s and people in their late 40s, we still have a full generation of greatly differing perspectives to work out. Do you think the views of the young will win by demographics, or that a big cultural rift is coming, or that people who didn't grow up digital will eventually adopt the outlook and norms of those who did?

Tapscott: It's true that there is variability within the Net generation (born 1978-1997). But the differences between them and other generations overall are much greater. The main difference is that because of their early immersion in technology, their brains work differently. These are also generational differences, not life-stage differences as some have suggested, and this is the first time in history when children are authorities on something really important to society. My study of 11,000 young people in 10 countries revealed they are also the first ever-global generation with (at least) eight norms that differentiate them from their Boomer parents and Gen-X predecessors.

However, I do agree that people who didn't grow up digital will move toward these norms. In the Net generation culture, we can see the new culture of work, the new marketplace, and even the new citizenship. There are problems and exceptions, but overall it's a culture of freedom, customization, scrutiny, integrity, collaboration, fun, speed, and entertainment. But given that a third of the human brain develops during extended adolescence, brain plasticity notwithstanding, many ways of thinking and learning will continue to differentiate them. As for the kids born after 1998, they are probably a whole other story.

A version of this article is scheduled to appear in the forthcoming issue of design mind magazine, published by frog in partnership with TED. Don Tapscott is the author of 14 books and an adjunct professor at the Rotman School of Management, University of Toronto. He has just launched the Don Tapscott App for the iPad. Watch his TEDTalk here. Follow him on Twitter: @dtapscott. Clay Shirky writes and speaks extensively about the Internet's effects on society and is the author of two books on the subject. He teaches at New York University. Watch his most recent TEDTalk here. Follow him on Twitter: @cshirky.