ElektronikerRSS Feed

Musing, marketing, and meaning in the connected world.

Davos Debrief: Data, Power, Happiness – It’s Getting Personal

Following a year in which “people power” was the rallying cry from the Arab Spring to Occupy Wall Street, the World Economic Forum (WEF) Annual Meeting 2012 in Davos, which ended last Sunday, might seem like an elitist anachronism, but it is worth noting how the WEF over the past few years has tried in earnest to include voices from civil society as well as younger generations – from new, very active communities within the WEF such as the Young Global Leaders and the Global Shapers to – this year – even Occupy Davos. The result: As a “platform for multi-stakeholder dialogue between business, society, and politics” (in the words of WEF founder and executive chairman Professor Klaus Schwab), the WEF is more relevant than ever (full disclosure: I am a member of the WEF Global Agenda Council on Values in Decision-Making).

This year’s theme was The Great Transformation (borrowed from Karl Polanyi’s seminal 1944 book), inspired by the urgent need to explore new models of leadership and value-creation in the wake of a fundamental (identity, confidence, moral?) crisis of capitalism (sovereign debt crisis, lack of trust in business, growing inequality, etc.). Consequently, Professor Schwab remarked in his opening speech: “Davos is the world’s sanatorium,” referring to the local facility that rose to world-literature fame through Thomas Mann’s novel The Magic Mountain. The mood was definitely somber, at least in the beginning, and lightened up only a few days into the conference when the intense debates and working sessions brought forward more optimistic approaches to solving the world’s pressing problems.

The main topics in Davos were the Euro crisis (of course); the Network Economy; Big (Personal) Data and its implications for our concepts of privacy, productivity, and collaboration; and Values (converging several strands such as Michael Porter’s more integrative “Shared Values” notion of corporate social responsibility, the rise of social entrepreneurship, or the quest to explore happiness as an alternative metric for measuring economic progress, both at a national and company level - more on that later).

If there was one overarching theme for all these tropes, then it was the dialectic relationship between the potential and the risks of technological innovation. One the one hand, optimists were bullish about the digital revolution that has given amateurs unprecedented access to technology, as Neil Gershenfeld, Director, The Center for Bits and Atoms, Massachusetts Institute of Technology (MIT), noted: “Technology is allowing ordinary people to change and improve the world.” This becomes manifest in digital literacy, grassroots innovation movements such as Maker Faire, 3D printing, the mobile apps developer ecosystem, open data, and hackers-for-good communities. And the emergence of cloud computing means than anyone can quickly launch data-intensive businesses, which is accelerating innovation, product cycles, and competition.

On the other hand, the gap between individual understanding and technological progress seems to be growing. People’s fears about misuse of personal data, which led the European Commission to propose rather draconian data protection laws for Internet service providers and other data collectors, is creating a “huge barrier to progress,” observed David Blumenthal, Professor of Medicine and Professor of Health Policy at the Harvard Medical School, and a member of the WEF Global Agenda Council on Digital Health. The general public needs to better understand science and technology, he urged.

Public Parts-author and digeratus emeritus Jeff Jarvis sees the digital revolution disrupt every single industry and institution, and believes that technology is leading to an “efficiency over growth” paradigm, with far-reaching implications: “Productivity will improve. Companies will be more profitable. Wealth will be created. But employment will suffer.” Jarvis acknowledges that great wealth can be created by serving millions of people with relatively small staff – see Google, Facebook, Amazon, and other icons of the digital economy – but he cautions that this might just further widen the income and capital disparity, which is “just wide enough today to cause unrest around the world,” as he writes on his blog. “That’s much of what #Occupy_WEF et al is about. That’s what is causing such tsuris and uncertainty on the stages of the world (Economic Forum). That’s what is causing the institutions represented here to fear, resist, and regulate technology in the hopes of forestalling the change it is bringing. There is the root of the disruption we’re witnessing now even in Davos.”

The Arab Spring exemplifies the ambivalence societies presently face when it comes to technology. Yes, technology has given ordinary people, particularly the youth, a voice to question the status quo and the power to even topple regimes. It has created and amplified (a sense of) urgency, and it has opened the door to being part of emerging governance, but as we witness in Tunisia, Egypt, and Libya, it has not necessarily enabled the creation of stable, truly inclusive governments and economies that produce the kind of steep job growth these countries so desperately need.

Technological innovation is also overshadowed by widespread pessimism and a credibility deficit that have resulted from the failure of institutions to effectively deal with a number of the recent economic and environmental crises. Trust in government and business has further plummeted, reports the Edelman Trust Barometer 2012, and there appears to be a fundamental loss of confidence in decision-making, with large parts of society – particularly young people and the majority of the impoverished – feeling that they’re being left out of the process, despite the democratizing effects of social technology and media. Some in Davos therefore called for a new “social covenant” that mandates fairness and mutual benefit for all, but not only by redistributing wealth more evenly, but by including all parts of society in the creation of wealth (“inclusive growth”) and the decisions that drive it.

But here’s the problem, as far as business is concerned: While there is broad consensus on corporations’ means (and responsibility) to positively impact society (the leadership role of business, so to speak), business leaders themselves may no longer be the right people to spearhead it. Sure, corporate bosses still hold considerable sway over creating a meaningful experience for their employees (they can “create and kill meaning,” asserts the McKinsey Quarterly). But although CEOs are undoubtedly held more accountable than ever, they are facing not only an erosion of trust but also an erosion of their power. A recent Economist article describes these "shackled CEOs" as Gullivers who are tied down by Lilliputian forces – whether these are powerful boards, empowered employees, or a public that demands radical transparency. Consequently, among the world’s 2,500 biggest public companies, the average job tenure for departing CEOs has fallen from 8.1 years in 2000 to 6.6 years today, according to consultancy Booz & Company. In light of this trend, buzz words such as “humble leadership,” “servant leadership,” “open leadership,” and “bottom-up leadership” make the rounds, and Doreen Lorenzo, the president of frog, contends that the increased complexity of decision-making will lead to a “post-CEO world” where companies must move “from a guru model to one based on team leadership.”

Ironically, at the political level, the most inclusive model, democracy, is losing its halo, as it becomes pressured by ever-more demanding citizens whose frustration with their elected representatives and more publicized cases of corruption, nepotism, and decision paralysis is nowadays quickly amplified by social technologies. The Euro zone may be on the brink of disintegration, and the democratic legitimacy of the European Union, with so much policy-making power delegated to supranational authorities in Brussels, remains questionable.

The potent alternatives were on show in Davos, but not everybody may 'like' them: For one thing, there is state capitalism, which can claim credits for driving recent history’s most remarkable economic success stories: Singapore, Russia, Brazil, the UAE, and of course China. Over the past three decades China’s GDP has grown at an average rate of 9.5% a year, and over the past ten years its GDP has more than trebled to $11 trillion. This makes it the world’s second-biggest economy, and the world’s biggest market for many consumer goods.

A digital governance alternative is Facebook, arguably the world’s most powerful transnational organization, with a network of users that would count as the world’s third largest country. It already stores more data than any national government alone, and with its popularity, network effects, and comprehensive analytics, it holds significant deterministic powers: it can mobilize communities, influence constituents, predict trends and events, and draw a possibly discriminatory line between inclusivity and exclusivity (“weblining,” as law professor Lori Andrews calls it in her NY Times article “Facebook is Using You”). Like Google, it is inevitably evolving into the “The Matrix” or the uber-stream of what David Gelernter prophetically anticipated in 1990 as “Lifestreams” – albeit with little to no space left for ambiguity: the vision of a data-centric universe is one where human decision-making will be binary, with targeting so chirurgical that every '(life)stream of consciousness' will end with a clear ‘yes.’

Conversely, optimists herald the same personal data as a potential source for human development (e.g., through e-philanthropy or open-data initiatives such as the Worldbank’s) and refer to the rise of social innovation, social entrepreneurship, for-profit activism, and the concept of the Social Enterprise (as in Marc Benioff’s “Speedy-Open-Collaboration-Individuals-Alignment-Leadership” line). All of which are all fueled by the “new oil” data, if only it is put in the right hands.

And data can propel happiness, which has emerged as the buzzword de jour in business circles, also in Davos. Zappos CEO Tony Hsieh has established it as his mission and primary business objective (shoes are just a means to an end), and his book Delivering Happiness was a national bestseller. Virgin, Coca-Cola, and other consumer brands have made it their core brand promise. Healthcare companies, and other industries, are looking into social products and services to promote it. After the King of Bhutan pioneered a Gross National Happiness Index in 1972, initially subject to much ridicule, NGOs such as the New Economics Foundation have been promoting it, and more and more corporations and governments (UK, India, France, etc.) are now exploring happiness as a holistic metric for economic progress and effective governance. And the Harvard Business Review, in its current issue, even devotes a special report to the "Value of Happiness,” arguing that employee well-being can boost productivity, customer loyalty, and ultimately profits. Two years ago, who would have thought that this publication had a cover on happiness! It seems as if the tougher the times, the harder the soft topics become. This is encouraging.

[image credit: The Globe and Mail]

Tim Leberecht is the CMO of frog and the publisher of design mind.