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What Does the GameStop Buying Spree Tell Us?
Villanova School of Business assistant professor Keith Wright was in the chat rooms when individual investors were discussing pumping up the GameStop stock and forcing the hedge fund shorts to have to cover, losing millions of dollars. "At the time, David was clearly beating Goliath," says Wright, adding that some of the young people on Reddit had done extremely well. "They made significant money on their investments. Some of them were a little late; you don’t want to be the last one in who takes the position at the top." He adds, "I have a feeling that this may actually be something revolutionary, and we're seeing the bottom of the pyramid—which is Generation Z, the Millennials, the Robin Hood investors—really changing the game." "Going forward, you've got this group that's collaborating, and that makes them extremely powerful," says Wright. "If they all follow each other into a position, they can really move markets in any direction they choose... Are they powerful enough as a group to defeat the hedge funds? Now, maybe they win this battle and they lose the war. Or maybe they win this battle and they decide to try a couple of others. This is not the only occurrence; this is one stock, but it's happening in a couple of other positions as well." As to whether a group of people should have this type of an effect on the stock market, Wright suggests that maybe it's a good thing. "We live in an economy where wealth is very unbalanced. You have a lot of people at the very top who are doing extremely well. But there is some inequity, and these short sellers used to crush the average retail investor, but no longer. Maybe this will create some equity, and maybe it will even the playing field a little bit."
IU Kelley School finance expert available to discuss GameStop, Robinhood
Charles Trzcinka, the James and Virginia Cozad Chair of Finance at the Indiana University Kelley School of Business and an expert on financial markets and investments, is closely following developments involving individual investors and Game Stop and available to talk with reporters. He can discuss the impact of retail investors using the popular Robinhood brokerage and Reddit’s “Wall Street Bets” page on the stock of low priced companies like Gamestop, AMC and stocks such as BlackBerry, Bed Bath and Beyond and Nokia. Several brokerages halt buying of those and other stocks on Thursday. Trzcinka teaches behavioral finance and is familiar with Robinhood's model is to use game technology to trade stock and how it makes money by selling the right to trade against the orders to hedge funds and high frequency traders. In order to schedule an interview, contact George Vlahakis, associate director of communications and media relations at the Kelley School, at vlahakis@iu.edu or 812-855-0846.
How the Biden Administration Can Help Save the Planet
With the inauguration of Joseph R. Biden as the 46th president of the United States came a slew of executive orders—and perhaps most notably America's reentry into the Paris Climate Accord. After the Obama administration joined the largest global cooperative agreement to limit the emission of dangerously climate-altering greenhouse gasses in 2015, the U.S. withdrew in 2017 under former president Donald Trump. Villanova University biology professor Samantha Chapman, PhD, studies how "blue carbon" solutions, like the restoration of wetlands, can contribute to slowing the harmful impact of climate change on the planet. Recently, Dr. Chapman broke down the top three things the Biden administration must do to save the planet, since we are, as she puts it, "close to some scary tipping points." #1: Pressure Brazil’s President Bolsonaro to stop the devastation of the Amazon. "The Amazon Rainforest regulates our global climate. It is imperative that through diplomacy and aid, we incentivize developing countries to preserve their intact lands and biodiversity. We can't do this without helping local communities incentivize the people living in these places to save these lands. Road building in forests is a huge cause of our planet's downward slope." #2: Invest in restoration of natural ecosystems. "We must invest resources into coastal wetlands and forests, here and abroad. USAID could be partially retooled in partnership with the United Stated Geological Survey (USGS), which already does this. These natural ecosystems will serve as natural climate solutions and be harbors for threatened species and nice places for humans to recreate. We must restore the opportunity for nature to re-invoke the necessary feedbacks that make the ecosystems work. Sometimes this involves complicated engineering, sometimes it is simpler and means giving nature space to restore. We're trying both." #3: Find ways to make people feel connected to land and nature—and value it. "This is a vague one and not one that I'm sure any administration can do. The pandemic has given me hope on this—I see so many more people out hiking, fishing, walking, and hanging out in parks. When time comes for voting on taxes, people have to remember that these state parks and preserves and even neighborhood parks cost money to staff and preserve. The U.S. has incredible land and nature and yet, in my experience, Americans value and understand it less than other countries. Some of that has to do with our frontier history. We can learn from Native Americans. Appointing Representative Deb Haaland as the secretary of the interior is one good step the Biden administration has taken in this direction." Dr. Chapman emphasizes that despite the uphill battle ahead, she remains hopeful. "Left to heal and helped to heal, the ecosystem processes that sustain our lives and those of the other amazing organisms on our planet can be restored," she notes. "Good things are happening. They just need to happen at a much larger scale."
Is hospital advertising actually good for our health?
Hospitals and healthcare organizations in the U.S. spend $1.5 billion on advertising every year. It’s a topic that provokes lively debate and a certain amount of controversy. Medical bodies, policy makers, and scholars alike question the ethics and efficacy of using (constrained) budgets to promote hospitals to patients. Diwas KC, professor of information systems & operations management at Emory University’s Goizueta Business School, and Tongil Kim, an assistant professor of management at Naveen Jindal School of Management in Texas, conducted a large-scale study of hospitals and patients in the state of Massachusetts to better understand the impact of hospital advertising. What they found is striking: Not only does television advertising work, it significantly drives demand, attracting patients living far from the hospital and beyond its regular area. And that’s not all. KC and Kim discovered that limiting hospital advertising or imposing an outright ban, as some groups have called for, might actually have serious negative effects on patient healthcare. “There has been a lot of discussion about banning advertising over recent years because of uncertainties around wasting money and resources,” KC said. In the paper “Impact of hospital advertising on patient demand and outcomes,” KC shows that there is a correlation between the amount spent on TV advertising and the quality of the hospital in question. Healthcare facilities that invest more in advertising tend to be “better” hospitals, he adds; they offer higher caliber care and services and, as such, they see much lower patient readmission rates—a key quality metric in healthcare. To get to these insights, KC and Kim looked at more than 220,000 individual patient visits to hospitals in the state of Massachusetts over a 24-month period. Among the data they collected were things like hospital type, location, and dollars spent on advertising. Patients were documented in terms of medical conditions, insurance, zip codes (to determine residence), and median household income. They were able to contrast those hospitals that invested in television advertising and those that did not. With the former, they uncovered a significant uptick in patient visits, with people coming from far further afield. This was particularly true of wealthier patients. Then there’s the question of patient outcomes. Here the data showed unequivocally that it’s the high-quality, low-readmission hospitals that advertise more—something that KC attributes to the natural tendency to get “more bang for the advertising buck when the quality of your product or service is better.” As for banning advertising, this would negatively impact these hospitals, he argues, limiting their ability to attract patients. It could also lead to an increase in population-level readmission rates. “Patient readmission rates are one of the key metrics along with mortality rates that tell us how well a healthcare facility is working,” said KC. “If a patient gets discharged but has to come back to a hospital in, say, 30 days, unless it’s a chronic condition or ongoing treatment, it’s a good indication that the patient didn’t get the level of care they should have the first time.” Indeed, “when we looked at all of the data, we found that the hospitals where there were fewest revisit rates were those that advertised more,” he said. KC finds that a blanket ban on hospital advertising could lead to an extra 1.2 readmissions for every 100 patients discharged. It’s a significant and “surprising” finding. And one that should inform the debate around healthcare advertising spend in the U.S. “There’s also the idea that this is a zero-sum game because if a patient doesn’t go to hospital A, they’re just going to go to hospital B—the one that advertises more—splitting the pie in different ways but not increasing that pie,” KC said. “What our study finds is that yes, advertising does draw patients away from one facility and towards another, but that the latter generally delivers better patient outcomes,” he said. “So, there is a social welfare benefit right there that suggests that you should not ban hospital advertising. There are real health benefits in allowing [advertising] to happen.” If you are a journalist looking to cover this topic - then let our experts help. Diwas KC is a Professor of Information Systems & Operations Management at Emory University’s Goizueta Business School. He is an expert in the areas of Data Analytics, Operations, and Healthcare. If you are interesting in arranging an interview - simply click on his icon to set up a time today.
Heads up CFOs: The capital asset pricing model still rules
Firms invest in various things: bonds, stocks or other assets—new stores, new premises or even other firms. And they do so to earn maximum value from available cash that would otherwise be idle. For example, for the last five years Walmart generated an annual cash flow of more than $25 billion from its operations. The retailer has the option to channel this cash into opening new stores, ultimately growing its business and profits. Alternatively, Walmart can pay the cash out to its shareholders in the form of dividends, or through share repurchases. So far, it’s been productive. However, this win-win scenario is contingent on successfully navigating a number of complexities. Primary among these is that to invest optimally, you first need to determine the correct hurdle rate for that investment. Hurdle rates are the minimum rates of return that firms seek on their investments. The hurdle rate is the appropriate compensation commensurate with the investments’ risk. Therefore, the higher the risk, the higher the hurdle rate needs to be. For instance, a hurdle rate of 10% means that for every $100 invested, you would expect to earn an average of $10 average per year. But it’s tricky. You have to calculate the right hurdle rate that would add the most value for your shareholders—the optimal rate of return for you and your business. Too high and there’s risk of missing out on a good investment. If your right hurdle rate is 10%, but you mistakenly opt for 15%, you’re likely to ignore any investment that is projected to earn you less than 15%, but more than 10% is likely to be missed. As a result, you’ll end up leaving money on the table. Too low a hurdle rate and you’re in danger of burning money. Again, supposing your hurdle rate should be 10%, but you set it at 5%, you’re likely to end up investing in things with a suboptimal return. In the end, you’re wasting your cash on low value investments when you could be paying it directly to your shareholders in dividends and giving them the chance to earn 10% return on their own. For the last 50 years, the financial world has built models to calculate hurdle rates and rates of return. But which one works best? Shedding critical new light on this is a recently published paper by Narasimhan Jegadeesh, Dean’s Distinguished Chair of Finance at Goizueta, entitled “Empirical tests of asset pricing models with individual assets.” Jegadeesh and his co-authors developed new statistical methods to differentiate among a raft of new models that have been developed in recent years and to compare their efficacy to that of the Capital Asset Pricing Model (CAPM), a model introduced in the 1960s. What they found is that none of the newer models work any better than the CAPM in determining the appropriate hurdle rate or rate of return of an asset. That paper is attached and is required reading for CFOs and anyone interested in the Capital Asset Pricing Model. If you are looking to know more, or if you are a journalist interested in covering this important aspect of business and investing – then let our experts help. Narasimhan Jegadeesh is Dean’s Distinguished Chair of Finance at Goizueta. He is a renowned expert in this field and has been published extensively in the Journal of Finance, the Journal of Financial Economics, the Review of Financial Studies and other leading academic finance journals. His research has been discussed in several publications including Businessweek, The Economist, Forbes, Kiplinger's Personal Investments, Money, New York Times, and Smart Money.
New York Times, Pornhub, Visa & Mastercard: The Debate
Yet another example of no one listening to sex workers Pornhub just made major changes to how their platform works, including expanded moderation and new guidelines for content uploads. Now, only verified users can upload videos to the platform – a decision which meant the total number of videos hosted on Pornhub were more than quartered overnight from 13.4 million to 2.9 million – and users can no longer download videos from the site. This comes after an expose on the New York Times, The Children of Pornhub, which investigated the number of rape videos being hosted on the site, including those of minors. The article, written by Nicholas Kristof, followed the lives of child sexual assault victims whose videos were uploaded onto the site. The op-ed launched a huge debate within the adult industry over censorship & moderation. People, rightfully so, do not trust Kristof because of his ties to anti-porn organisations and his reputation when it comes to reporting on sex work. In the past he has been accused of conflating sex work with sex trafficking, using misleading statistics, and was instrumental in the shutting down of Backpage, a vital safeguarding tool for sex workers, calling it “the pillar of sex trafficking”. He also quoted Laila Mickelwait in the op-ed, who is an activist and director of Traffickinghub, a campaign launched by Exodus Cry which has anti-sex work, anti-LGBTQ and anti-abortion links (it’s founder reportedly compared abortion to the holocaust). This week, two days after Pornhub announced their changes, Visa and Mastercard started an investigation and soon announced that their cards would no longer be accepted on the platform. This has left Pornhub with no way to process payments other than with cryptocurrencies. It goes without saying that the decision from Visa & Mastercard has panicked adult content creators who make their living from paid content on Pornhub. Because let’s be clear, Mastercard & Visa’s decision will not hurt Pornhub, who always have and always will continue to make money off of stolen content, this decision hurts sex workers – the people that Pornhub has never cared for. Adult performers, producers and directors have spent years speaking out about the exploitation within Pornhub and the tube site business model, yet no one has listened. MindGeek, the parent company of Pornhub, dominates online porn. It has completely demolished the industry and drained money out of the industry by stealing performers’ work and giving it away for free, and by monopolising the industry. MindGeek is an aggressive tech company through and through, it does not care about porn or adult content creators, it cares about traffic and advertising. It also owns production companies which means performers who may want to speak out about the system ultimately can’t for fear of being black listed from the production companies and therefore having less work and even less money. "Adult performers have spent years speaking out about the exploitation within Pornhub and the tube site business model, yet no one has listened" Pornhub does not care about performers and it’s clear that Kristof doesn’t either, but it wasn’t until the New York Times covered this issue that Pornhub did something. I wonder why? If properly implemented by Pornhub, their new regulations could have had a significant impact on illegal and stolen content, which would be a win for adult performers who have no choice but to use the platform. But with the new ban from Mastercard & Visa, they could now be in an even worse position than before. This is yet another example, just like SESTA/FOSTA, that shows that when it comes to making changes to the adult industry we must speak to sex workers & have their involvement in policy. Pornhub, Mastercard, & Visa, do not care about the issue of rape videos or of pirated material, these are policies that were brought in under pressure to “do something” out of fear of negative publicity. We know that Pornhub does not care about the content it hosts, the people it hurts or the lives it ruins – they have shown us this time and again. Just last year they demonstrated this with the Girls do Porn case. Despite 22 women coming forward to sue Girls Do Porn for uploading explicit videos of them to Pornhub without their consent, Pornhub refused to remove the videos from the platform, even promoting them, until Girls do Porn were finally charged with sex trafficking. Now is not a time to protect Pornhub, it’s time to protect and support the people who will actually be harmed by this. We must remember who have been talking about this for years whilst no one has listened; sex workers. Please go and find performers and indie producers that you want to support and pay them for their work. Whether it’s on Only Fans or through their personal websites, pay & support sex workers & adult content creators.
Savannah is drenched in history, but many of the city’s stories often go untold. Four Georgia Southern University history students aim to shed light on these untold stories as a part of their project, Savannah History Remix. The project, developed by graduate students Lauren Della Piazza Hartke, R. Dalton Bryant, Noah Prince, and Dalton Blackmon, is a series of walking tours featuring lesser-known stories of Savannah’s history. “The walking tours seemed like the safest bet and a good opportunity to learn some digital skills,” said Assistant Professor of history Alena Pirok, Ph.D., who is overseeing the project. “The tours intend to bring new and useful historical information to the city, its residents and the historical tourism industry.” When the project began, the students identified subjects not found on commercial tours of Savannah, including modern immigration, laborers, common people of Savannah and the LGBTQ community. Hartke created the tour, “A Seat at the Table: A Social History of Savannah’s Foodways,” which revolves around the culinary history of the city. “My goal for this project was to show how Savannah’s food scene today is the product of many years of input and contribution from many different subgroups of peoples,” she said. “I want people to understand how our notion of southern food is the product of English, West African and Native American foodways, combined with regional practices unique to Savannah’s economy and ecology.” Pirok said the Savannah History Remix tours have more freedom than commercial tours. “A non-profit tour like ours does not have to worry about losing customers and money,” she said. “This gives us the freedom to take more risks and to offer new, but academically sound, historical narratives that people do not find familiar or ones that might challenge their vision of the world.” Despite COVID-19, students at Georgia Southern University are combining innovation, technology and creativity to see the projects they want to fulfill come to fruition. If you’re a journalist looking to know more about the Savannah History Remix or similar projects, simply reach out to Georgia Southern Director of Communications Jennifer Wise at jwise@georgiasouthern.edu to arrange an interview today.
Criminals are opportunists, and the COVID-19 global onslaught has brought with it not just health threats but cybersecurity risks, too. Within weeks of the COVID-19 outbreak, hackers have already commandeered the virus to unleash cyberattacks, sending emails purporting to provide coronavirus guidance laced with cyberattack software. In one more alarming case, they appear to have attacked a hospital and forced it to cancel operations and take key systems offline. As the outbreak continues to intensify, the UK National Cyber Security Centre (NCSC) warned that the volume of these attacks will likely increase, pointing to the increased registration of coronavirus-related webpages. Criminals are opportunists, and the COVID-19 global onslaught has brought with it not just health threats but cybersecurity risks, too. As companies move to protect the health of their workforce, it’s also important to protect the systems they’re using to run their businesses. It’s especially important for hospitals to shore-up their cyber defenses. If they don’t, just as they are racing to respond to COVID-19, they could face situations like University Hospital Brno in the Czech Republic, which earlier this month was forced to divert patients and cancel planned operations while it worked to address an attack. The most likely cyber threats are email “phishing” campaigns that use the coronavirus as a lure to get the recipient to open an attachment that contains malware. According to the NCSC, such “phishing” attempts are happening on a global scale in multiple countries, which has led to both a theft of money and sensitive data. Similarly, known hacker groups have been launching websites purporting to sell masks or other safety-related measures for coronavirus, possibly to use them as another vector for cyberattacks. The NCSC has also cautioned that these attacks are “versatile and can be conducted through various media, adapted to different sectors and monetized via multiple means, including ransomware, credential theft, bitcoin or fraud.” The cybersecurity firm ProofPoint has seen a rise in these cyberattack emails with COVID-19 themes since January. Both ProofPoint and IBM’s X-Force cybersecurity unit identified a campaign that targeted users in Japan with an email masquerading as a coronavirus information email that carries with it a potent type of cybercrime software. In the US, the Secret Service recently warned of scams from online criminals posing as sellers of high-demand medical supplies to prevent coronavirus. They’ll require payment upfront and not send the products. Cyber criminals have also been posing as the World Health Organization and the US Centers for Disease Control and Prevention (CDC), sending fraudulent emails from the former and “creating domain names similar to the CDC’s web address to request passwords and even bitcoin donations to fund a vaccine” for the latter. In addition to the use of the coronavirus as a cyberattack vector, the growing need for working remotely to mitigate the spread of COVID-19 has increased companies’ exposure to cyber threats. The increase in remote work creates more opportunities for hackers to make inroads from less secure locations. Companies should also ensure they can provide adequate security when their whole workforce is remote. They should quickly work through the security implications of workers choosing to switch to insecure personal devices. With national-level pressures on home broadband, staff will also resort to mobile hotspots, which are often less secure. And enabling remote connectivity at scale, with the right security configurations, can be a challenge even with months of preparation time. A recent US Department of Homeland Security COVID-19 cybersecurity notice pointed to the importance of making sure that security measures are up to date for companies’ remote access systems. Additional measures to consider include enabling multifactor authentication—which can require two or more steps to verify a user’s identity before granting access to corporate networks. The NCSC is also working to identify malicious sites responsible for phishing and cyberattack software. A final looming cyberthreat related to Covid-19 is disinformation. The World Health Organization and other agencies have for months been combatting disinformation campaigns spreading false information about the origins of and treatments for COVID-19—reports that seed more confusion and increase risks to society. All of that means that computer virus risks are emerging as the biological virus spreads—and both are a threat to business. Cyber risk mitigation efforts should account for the different ways that a company can be affected, including impacts on the technical, operational, legal and reputational aspects of a business. Often, the reputational effects of a cyberattack are more significant than direct the business or technical impact. To mitigate all of the potential impacts of cyberattacks taking advantage of the Covid-19 outbreak, companies should: Review and update crisis and cybersecurity response plans, and ensure internal and external communications response plans are robust. Confirm that members of the crisis management team understand their roles and responsibilities. Make sure all communications channels have the latest security patches. Review and update access controls, particularly when remote access is used heavily, to make sure that only those who require access to sensitive systems to do their jobs have it. Take extra care when handling medical information. For companies managing employees who have contracted Covid-19, it’s important that personal health information is handled with strong security measures, including encryption. Educate employees about the cyber risks that may attempt to capitalize on fear of the Covid-19 virus—whether it be phishing email or disinformation. Covid-19 poses a number of short- and long-term challenges to business resilience, and the virus’s trajectory is quick and unpredictable. But it’s possible to anticipate and mitigate a number of the cyber threats that will try to ride the virus’s coattails. The companies that do will be more resilient and better positioned to withstand the direct health and operational effects of the virus.
Best-selling author Peter Singer talks with the Brunswick Review about winning the increasingly crowded and contentious war for attention What do Isis and Taylor Swift have in common? According to author and digital-security strategist Peter Singer, both the terrorist organization and pop star are fighting for your attention online and employing similar tactics to try and win it. ISIS kicked off its 2014 invasion of Mosul with the hashtag, “#AllEyesonISIS.” More recently, the terror group posted photos of its members holding cute cats in an effort to make them more relatable – tactics familiar to most celebrities and online marketers around the world. These online battles, the rules governing them, and their real-world impact are the focus of Mr. Singer’s latest book, LikeWar, which he coauthored with Emerson T. Brooking, at the time a research fellow with the Council of Foreign Relations. “A generation ago people talked about the emergence of cyber war, the hacking of networks. A ‘LikeWar’ is the flip side: the hacking of people and ideas on those networks. Power in this conflict is the command of attention,” says Mr. Singer, who in addition to his writing is also a strategist and Senior Fellow at the New America Foundation. Pretty much everyone who posts online – from governments to marketers to reality TV stars – is a combatant in this fight for virality, according to Mr. Singer. Triumph in a “LikeWar” and you command attention to your product or propaganda or personality. Lose and you cede control of the spotlight and the agenda. Mr. Singer recently spoke with Brunswick’s Siobhan Gorman about the trends he’s seeing in LikeWars around the world, and what companies can do to avoid being on the losing end. What were you most surprised by in researching LikeWar? One of the more interesting characters in the book was at one time voted TV’s greatest villain: Spencer Pratt, a reality TV star on MTV’s “The Hills.” He’s basically one of these people who became famous almost for nothing. But what Pratt figured out really early was the power of narrative, which allowed him to become famous through, as he put it, “manipulating the media.” In the same week, I interviewed both Pratt and the person at the US State Department who’s in charge of the US government’s efforts to battle ISIS online. And Pratt, this California bro who’s talking about how to manipulate the media to get attention, understood more of what was playing out online than the person at the State Department. Spencer Pratt, a reality TV star… understood more of what was playing out online than the person at the State Department.” How much have online conflicts changed the rules in the last few years? First, the internet has left adolescence. It’s only just now starting to flex its muscles and deal with some of its responsibilities. The structure of the network changes how these battles play out. So, it’s this contest of both psychological but also algorithmic manipulation. What you see go across your screen on social media is not always decided by you. The rule makers of this global fight are a handful of Silicon Valley engineers. Another aspect of it is that social media has effectively rendered secrets of any consequence almost impossible to keep. As one CIA person put it to us, “secrets now come with a half-life.” Virality matters more than veracity; the truth doesn’t always win out. In fact, the truth can be buried underneath a sea of lies and likes. And the last part is that we’re all part of it. All of our decisions as individuals shape which side gets attention, and therefore which side wins out. But you highlight that this is playing out differently in China. Exactly. There are two different models shaping the internet, and shaping people’s behavior through the internet, playing out in the West and in China. Essentially, internet activity in China is all combined. Look at WeChat, which is used for everything from social media to mobile payment; it’s Amazon meets Facebook meets Pizza Hut delivery. And you combine that with an authoritarian government that’s had a multi-decade plan for building out surveillance, and you get the social credit system, which is like Orwellian surveillance crossed with marketing. The social credit system allows both companies and the government to mine and combine all the different points of information that an online citizen in China reveals of themselves, and then use that to create a single score – think of it as your financial credit score of your “trustworthiness.” For example, if you buy diapers your score goes up, because that indicates you’re a parent and a good parent. If you play video games for longer than an hour your score goes down because you’re wasting time online. And it’s all networked. Your friends and family know your score. It creates a soft form of collective censorship; if your brother posts something that’s critical of the government, you’re the one who goes to him and says, “Knock it off ’cause you’re hurting my score.” And you do that because the score has real consequences. Already it’s being used for everything from seating on trains and job applications to online dating. Your score literally shapes your romantic prospects. So, you have this massive global competition between Chinese tech companies and other global tech companies not only for access to markets, but also for whose vision of the internet is going to win out. How can companies win a “LikeWar”? Everyone’s wondering: What are the best ways to drive your message out there and have it triumph over others? The best companies I’ve seen create a narrative, have a story and have emotion – in particular, they have emotion that provokes a reaction of some kind. It’s all about planned authenticity. That sounds like a contradiction, but it’s about acting in ways that are genuine, but are also tailored because you’re aware that the world is watching you. A good comparison here is Wendy’s versus Hillary Clinton. Wendy’s is a hamburger chain – not a real person – but it acts and comes across as “authentic” online and has developed a massive following. They’re funny, irreverent. Yet Hillary Clinton – a very real person – never felt very authentic in her online messaging. And that’s because it involved a large number of people – by one account, 11 different people – all weighing in on what should be tweeted out. Inundation and experimentation are also key. Throwing not just one message out there, but massive amounts of them. Treating each message as both a kind of weapon, but also an experiment that allows you to then learn, refine, do it again, do it again, do it again. How do you measure and gauge battles online now? Is it just volume? It all depends on what your battle is, what your end goal is. Is it driving sales? Is it getting people to vote for you, to show up to your conference? This is what the US gets wrong about Russian propaganda and its disinformation campaigns. We think they’re designed to make people love or trust a government. From its very start back in the 1920s, the goal of propaganda coming from the Soviet Union, and today Russia, has been instead to make you distrust – distrust everything, disbelieve everything. And we can see it’s been incredibly effective for them. First, we need to recognize that we’re a part of the battle. In fact, we’re a target of most of the battles. How effective have disinformation campaigns actually been in the US? What can be done? One of the scariest and maybe saddest things we discovered is that the US is now the story that other nations point to as the example of what you don’t want to have happen. There’s no silver bullet, of course. But one example was something called the Active Measures Working Group, a Cold War organization that brought together the intelligence community, diplomats and communicators to identify incoming KGB disinformation campaigns and then develop responses to them. We’re dealing with the modern, way more effective online version of something similar, and we haven’t got anything like that. There are also digital literacy programs. I find it stunning that the US supports education programs to help citizens and kids in Ukraine learn about what to do and how to think about online disinformation, but we don’t do that for our own students. What can people like you or me do? First, we need to recognize that we’re a part of the battle. In fact, we’re a target of most of the battles. And we need to better understand how the platforms work that we use all the time. A majority of people actually still don’t understand how social media companies make money. The other is to seek out the truth. How do we do that? And the best way is to remember the ancient parable of the blind man and the elephant – don’t just rely on one source, pull from multiple different sources. That’s been proven in a series of academic studies as the best way to find the facts online. It’s not exactly new, but it’s effective. Where will the next online war be fought? The cell phone in your pocket, or if we’re being futuristic, the augmented reality glasses that you wear as you walk down the street. It’ll come from the keepsake videos that you play on them. If you want to know what comes next in the internet there have always been two places to go: university research labs and the porn industry. That’s been the case with webcams, chat rooms and so on. What we’re seeing playing out now are called “deep fakes,” which use artificial intelligence to create hyper-realistic videos and images. There’s also “madcoms,” which are hyper-realistic chat bots that make it seem like you’re talking to another person online. Combine the two, and the voices, the images, the information that we’ll increasingly see online might be fake, but hyper-realistic. The tools that militaries and tech companies are using to fight back against the AI-created deep fakes are other AI. So, the future of online conflict looks like it’ll be two AIs battling back and forth. Let me give you a historic parallel, because we’ve been dealing with these issues for a very long time. The first newspaper came when a German printer figured out a way to monetize his press’s downtime by publishing a weekly collection of news and advice. And in publishing the first newspaper, he created an entire industry, a new profession that sold information itself. And it created a market for something that had never before existed – but in creating that market, truth has often fallen by the wayside. One of the very first newspapers in America about a century later was called the New England Courant. It published a series of letters by a woman named Mrs. Silence Do-good. The actual writer of the letters was a 16-year-old apprentice at the newspaper named Benjamin Franklin, making him the founding father of fake news in America. In some sense it’s always been there, using deception and marketing to persuade people to your view.
Businesses must have a strategy for a messy tomorrow
John Kim is a Senior Lecturer in Organization & Management at the Goizueta Business School at Emory University. He is a management consultant with more than 20 years of experience working with executives to make difficult decisions and implement sustainable change. Recently, John published a piece that details a ‘Strategy for a messy tomorrow’ where he outlines how businesses must have a strategy development and implementation for an unpredictable business world. The piece is attached and a must read, especially in these turbulent and unpredictable economic times. In the article, he focuses on three key points: 1.Beware of False Choices “One thing we try to teach here at the business school is to be careful of false choices. Business is incredibly dynamic. Every industry is now a technology business, and the corporate playbook that evolved to protect profits is quite outdated.” Kim notes that Thomas Friedman poetically described this new normal in his 2005 book The World is Flat, and over the last 15 years, competition has only accelerated because of the explosion of two resources: cheap money and data. Kim notes that it’s a great environment to start or fund a business because interest rates have been low for the last 10+ years. There are dozens of new entrants in all industries, and all parts of the value chain, who are often well-funded, flexible, and are not weighed down by legacy business models and assets. The big winners are the customers who have increasing choice, lower prices, and great value capture. 2.The Challenging Environment From his corporate experience, Kim sees two significant challenges to strategy implementation. First, senior leaders turn over quickly. “It’s hard to have consistency of vision and leadership and implementation when there is such a movement in the C-suite with someone moving in and someone moving out every 5–6 months. So, it’s not a surprise that a lot of strategies either don’t follow through or there are too many cooks in the kitchen, and strategy gets a little bit muddled as a result.” Secondly, when the strategy does eventually make it to the ground-floor and needs to be executed, things have often moved on, and the market responses are rarely the ones you expect. Riffing on Peter Drucker’s famous quote on uncertainty, Kim explains to his students that, “Instead of trying to think of something brilliant to do tomorrow, why don’t you think of something very actionable today that prepares us for what we know will be a totally messy, crazy, unpredictable tomorrow.” 3.A Business Executive’s Response The business executive’s job is to not only set the direction, build a climate of trust, and create the energy for change—but also to be willing to test the assumptions and constraints around a given problem. Increasingly the answers will lie outside of a given industry, and thus require leaders to be broader in their horizon-scanning and more open to alternative paths forward. If you are interested in learning more about why business do indeed need a a strategy for a messy tomorrow – the let us help. John Kim is available to speak regarding this topic – simply click on his icon now to arrange an interview today.
