There is point where the world of C-level executives, business consultants, and investment talking heads form a kind of cult. At this point, business is less about society and economics, and becomes a religion with its own sacraments and dogma. Perhaps you have heard their creed, “Our first responsibility is to the shareholders.” Or maybe, “We are always looking to maximize profitability.” The world is starting to wake-up and realize that profitability may not be the guiding light of Capitalism after all. The real measure of success should be: Sustainability.
What Does It Mean for a Business to Be Sustainable?
Sorry environmental advocates, I am not talking about being “green.” Sustainability means that a business is doing a good job of being stable, durable, and viable throughout external economic changes and upsets. It also means the business processes and culture are so strong they cannot be upset with the slight loss of any leaders, employees, or executives. Of course, business that are sustainable in this manner are often the first to be environmentally friendly as well, but that is more of a correlation than a cause.
“Up and to the Right” Is NOT Sustainable
While a successful business is starting up, it is going to have a few years of pretty solid “up and to the right” growth. This happens for one reason: If an entrepreneur had a good concept for a business, then he has successfully identified a need and matched an effective solution, that means his business will naturally expand until it meets “critical mass” with that need. However, once that need is being met in the mass market, there is no longer room for the business to expand so dramatically. (see chart)
Once a business is supplying to a need at “critical mass,” it will fluctuate along with its market. If the market shrinks, it shrinks, if the market grow, it grows, and so on. Investors, shareholders, and market commentators just can’t help but PANIC when they see their nice little “up and to the right” arrow turn more into a slight slope. This means that perfectly sound and viable businesses are often put under extreme and harmful pressure to continue “up and to the right” which leads to bad decisions. “Critical mass” doesn’t mean a company will never see huge growth again, it just means a new market has to be found.
Sustainability is Ultimately About Employee Well-Being
Profitability comes from loyalty, productivity, and having a character base from which to work.
- Zig Ziglar
Most of the bad decisions which come from “up and to the right” obsession is toward employees. Once a business has hit “critical mass,” the only way to boost profit in a hurry is to squeeze employees. This works for a period of time long enough for whatever jack-ass who suggested it to look like a business wizard. However, after a little more time has passed, turn-over shoots up, high-quality workers avoid you like the plague, and the quality if your products and services sink like a bodybuilder in a pool.
Business is About Making the World a Better Place
Power and politics can keep bad businesses in place for a certain period of time, which can give the illusion that Capitalism supports corruption. However, as time passes, and as history shows, the business which stick around are those which did a good job of making our lives better, and improving the lives of their employees. Hopefully, investors, shareholders, and board members will learn sooner-rather-than-later that they should prop up leader capable of making sustainable businesses which can endure, not profit bubbles that are here today and *pop* tomorrow.
We Need Better Financial Incentives
As a final note, we need a better form of investment. The other problem is that the current stock market actually rewards business drama, the quick rise and fall of companies, and incentivizes extremes. Thanks to the ability to short a stock, hedge funds, and other little tricks-of-the-trade people make more money on the quick rise and sudden destruction of companies. Of course, these people are not the majority of people, so the rest of us don’t benefit from this tradition of playing with fire. We need to change the rules to match the best interests of the economy and reward sustainability over quick profit and dramatic collapse.
Capitalism: You’re Doing It Right!
Here is an article on how Chipotle is making their business sustainable for profit and employees: http://www.foodtechconnect.com/2014/06/24/chipotle-vision-for-future-sustainable-restaurant-design-operations/
Here is a video of the CEO of Starbucks, Howard Schultz, talking about sustainability and employee interests at his company:
Super heroes are as popular as ever, including my childhood favorite: Batman. Batman evolved out of our need for a more “complex” super hero. The black and white representation of the “good society’ and the “bad criminals” in the golden age gave way to a kind of of heroic cynicism. So enters Batman. A hero who fights against the corruption of institutions as well as the violence on the street. However, even Batman is an avatar of our misunderstandings of the nature of real society and justice. More than just Batman, the idea of dedicated vigilantes with virtue of any kind is pretty much a fairy tale.
There Will Never Be A Joker
Like many others I LOVED Heath Ledger’s Joker in The Dark Knight. I loved him because he played the villain the world has never known, nor will. You see, the human psyche is not capable of doing something “evil” while being aware of it at the same time. Murderers, psychopaths, rapists, and thieves all act out of a perverted sense of justice or rationalization. The Joker, however, was completely clear-minded about his actions, which is why he was so dangerous.
If there was ever a human being capable of being completely self-aware of their actions, while still acting as intentionally “evil” they would truly be unstoppable. However, even mafia and mob leaders have seemingly contradictory values of family, loyalty, and honor. The idea of a Joker is a phantom in the human psyche, something we all fear but is ultimately non-existent.
What Society Calls “Crime” Is Only Half the Picture
On that line of thinking, people only commit crime when they feel they can no longer trust or rely on society to help them or have their best interests in hand. Thieves feel society hasn’t given them a fair chance at success. Gangs are full of people who are looking for family and acceptance. I am not saying their actions are justified, just again pointing out they don’t see themselves the way we do.
To be a “Batman” or superhero requires a kind of pure conviction. You have to believe, whole heartedly, you are fighting evil to justify the sacrifice and stress of the job. Even soldiers struggle to maintain that kind of blind conviction. More and more, society is learning that crime is really just a symptom of greater issues in our social systems and institutions.
You Can’t Fight Crime and NOT Kill People
It makes for good TV, and keeps Saturday morning cartoons running, but idea of a vigilante never killing people is just silly. Even if you never TRIED to kill anyone, people are going to die just by the natural violence of fighting. People die today in boxing areas, MMA, and even regular sports’ accidents. There is an old Samurai code, “Do not draw your sword until you are ready to kill.” This is the true nature of conflict and violence. On that note, I think even our real police draw guns too flippantly.
“Us vs. Them” is a Mental Disorder
The infamous MMPI (or Minnesota Multiphasic Personality Inventory) test lead to the common misunderstand that police and criminals have “the same psychology.” What the test really showed was that VIOLENT police, the kind we now catch on camera beating people, have the same psychology as many VIOLENT criminals. That psychology? The belief of “us vs. them” and good guys vs. bad guys.
Violent criminals have often come to believe that society is against them. While violent cops often believe that they are here to fight evil criminals. Either way, “us vs. them” is a mental disorder as the very root of all violence. Sadly, our history of super-hero stories have fed our appetites for this simple black-and-white conflict.
The Kind of Heroes We Really Need
The best police officers, and they are out there, are the ones who appreciate the complexities of society. They don’t see their job as “good vs. evil” but a job of trying to protect people, often even from themselves. Anytime we think we are truly the “heroes” of a story or situation, we are at the greatest risk of creating evil ourselves. We need less stories about “good vs. evil” and more stories about people working to overcome their own evils together.
Now, I am still going to watch any and every Batman movie out and yet to come, because Batman awesome. I am just going to keep in mind the story is fiction. Besides, Superman is the real “good vs. evil” tool anyway.
The screams are growing louder and louder as researchers, scientists, and journalists just can’t understand why people refuse to believe what is “obviously true” about climate change and vaccinations. The phrase “scientific consensus” has become like a beating drum, said over and over. These two issues represent “crazy” on both sides of the aisle. Conservatives tend to deny climate change, and many liberals are out touting vaccines as conspiratorial and unsafe.
Why do so many people refuse to believe what 99% of scientists agree on, or what 99% of medical professionals agree on? Here is why that pesky 1% is putting up so much a fight…
Cognitive Dissonance - The more we don’t know, the more stubbornly we know it.
There is a pain we feel, a real physical discomfort, when our minds are forced to consider two opposing ideas. This discomfort is called “cognitive dissonance.” Because of this discomfort, most people will quickly jettison an idea which opposes their previous assumptions and patterns of thinking. The less educated, informed, or knowledgeable on a particular subject, the more painful it is for us to consider new information. Because of this, the less knowledgeable someone is on a subject, the more stubborn they tend to be on it.
Reactance - The more people tell us we have to do something, the less we want to do it.
We are actually hard-wired to want personal freedom. Yes, we often have a herd mentality or group-think, but even though we often conform to those around us, we will only do this if we felt like it was our choice to do so. The more people who come up saying we have to do something, the less we want to do it. This is a well-documented cognitive behavior called “reactance.” The most famous example of this is Architect talking to Neo in The Matrix Reloaded saying explaining that people have to “choose” to be in the Matrix, even if that choice is sub-conscious.
Confirmation Bias - We value information we have more than new information.
If you know a “fact” or piece of knowledge, that information is more valuable to you than a hundred bits of new information. If we are presented with thousands of pieces of new information, we will still prefer our one piece. Therefore, if the new information contradicts with the information we already have, we will reject it. The only way we accept new information is if the information we already have “fits” with it. Our personal data is precious to us, and we won’t let it go if at all possible.
Growing Resistance - he more we are “certain” the more others will deny it.
It is like Newton’s third law of physics: For every action, there is an equal and opposite reaction. The more consensus builds and demands conformity, the more stubborn opposition grows.
So How Do We Overcome These Problems?
When a minority of information is ignored, it grows in strength. If “doubters” could see their concerns being taken seriously, instead of brushed off, they would start to open their minds. We have to take time to let everyone know we have listened, considered all the alternatives, and build consensus instead of try to strong-arm it. Saying things are “fact” and drumming “consensus” alienates people, and can also foster a dangerous level of arrogance.
American football will never be as globally popular as soccer (what the the rest of the world calls “football”). The economic drivers behind soccer are so powerful, that there is no chance of it being over-thrown any time soon. What are these drivers I speak of? They are the economics of a child and a ball.
Intrinsic value refers to the inherent features and benefits a product or service has. In other words, whatever changes in the world around it, the value it still and always has. When you ask people why they love a particular sport, they often tell you it is because of the intrinsic value. “I love it for the strategy.” or “I like the action and find it entertaining.” However, economics have taught us that the real reason we enjoy a sport is for the extrinsic value, or what we bring to it.
Here are the extrinsic values which make us love a sport:
So this all adds up to the main reason a person will prefer and enjoy one sport over another:
IF THEY ENJOYED IT AS A CHILD.
Stop for a minute, and think outside the box of suburbia, salaries, and disposable income. Of all the sports in the world, soccer requires the least investment. The affluence we enjoy here in America (yes, even our lower-middle class), is not enjoyed everywhere. In reality it is the exception. The majority of children around the world are growing up at what we consider the poverty level.
Many sports require lots of equipment, gear, and tailored environments. Golf, of course, being the most extravagant of all. American football requires LOTS of gear for protection. And even if you are resourceful with a basket, you still need a flat reliable surface to practice basketball. But what do you need for a few kids to practice soccer? A ball.
Yes, you still need a field to play soccer officially. But kids all over the world can make due with just about any surface or land available to them to practice and play soccer. No bats, no baskets, no gloves, no helmets… just a ball. So the reason most of the world loves soccer is that children around the world still have the greatest chance of being exposed to, accessing, and enjoying soccer.
All this being said, the most effective way to grow a market with sports is to make it accessible and fun for children. No amount of clever commercials, big graphics, and huge stadiums are going to really make a difference for any major sport franchise. What our kids play today are what adults watch tomorrow. Because of this, soccer is here to stay for a very long time. And the way the US economy keeps going, it is going to grow in popularity here as well.
If you go to an Apple Store on a slower day, you may notice there is still a pretty large amount of “blue shirts.” A second look, and it is easy to discover the reason for this: they aren’t just selling anymore. Just about any other retail store in the mall will have a ratio of about one employee to five customer. Apple is running almost one-to-one on non-peak days. This isn’t just because of Apple’s popularity. No, it is a sign of the next era of retail: selling expertise and ecosystems.
When Supply and Demand Switch Places
Supply and demand has been the pillar of economic development for centuries. Innovations have largely been centered around delivering more “in demand” products at lower cost and with greater efficiency. Demand came first, and then business would respond by producing supply. The iPhone is, however, a great example of a new phenomenon beginning to emerge: supply coming before demand. More specifically, the ability to create something no one was asking for, and suddenly everyone wants.
Not that Apple is the only company to do this, inventions have been creating demand from Thomas Edison’s light bulb to Sony’s Walkman in the 80s. However, there is something unique about Apple’s revolution, creating demand for a product people don’t know how to use. For that one, I can only think of Henry Ford’s Model-T as a possible parallel. Even today, we all still have to learn to drive a car before we can buy one. But in all, there haven’t been a lot of world-changing products that weren’t pretty easy to just pick up and use.
Because We Aren’t Smart Enough to Know What We Want
Modern emerging products, such as cloud based solutions, software as a service, and integrated technologies are all being developed PAST the demand curve. Meaning that we have more supplied products and solution that most of us even know how to use or integrate into our daily lives. So where are these companies coming from if we aren’t demanding their products and services? Well, investors have come to realize that the marketing doesn’t really know what it wants next. Everyone is betting on the next Bill Gates and Steve Jobs to tell us what we want.
Selling a Lifestyle
In order to get the most from your shiny new Apple products: MacBook, iPhone, and iPad (the holy tech trilogy), you have to have a certain amount of base knowledge for using them. Apple, Google, Microsoft, and Amazon (sorta) are all now competing on lifestyle solutions more than the actual products. Each company providing a whole range of integrated software and tech to handle our lifestyle needs. In other words, we no longer buy products to match our daily needs and habits. We are beginning to model our lives around the systems created for us.
Education and Accessibility: The New Battleground
So this comes back to the INVASION OF THE BLUE SHIRTS at Apple retail stores. Apple is still showing they are ahead of the curve by throwing their resources at helping as many people as possible adapt to the Apple/iCloud lifestyle. Microsoft is learning to follow suit, and Google is still hoping their loyal geeks will be enough to bring their immediate families up to date (*guilty*). Samsung has also been proving their obsession with copying Apple by trying to do the same thing at Best Buy stores (but not very well.)
In-store training, access to advice and experts, classes on how to maximize products and software tools, large support communities; these are the new ways retail is going to have to grow their competition. And as we keep growing this competition, switching from one ecosystem to another is going to become harder and harder, meaning that converting a customer is worth more than ever before.
Tech Retail is Only the Start!
Furniture retail has learned that you can’t just sell furniture, you have to sell rooms and designs. Kitchen retailers are starting to teach customers how to cook. There are even new online clothing retailers coaching their customers on how to dress! (http://www.trunkclub.com/) Everyone thinks the Internet is killing retail, but really it is just changing its core purpose.
Before the Internet we needed retail to SHOW us what we could buy, something the Internet does a hundred times better. However, a physical retail store can still have an advantage with showing us how to USE products, especially when we need to use multiple products together. Retail stores that innovate ways to be a gateway for customers to better their life or enter a lifestyle are the ones that will last through the next couple decades.
Last month, I had the privilege to give a talk to the Science Cafe in Indianapolis. This article is a summary of my presentation and discussion. Before moving forward, I just want to give a shout-out to everyone interested in science, intelligent discussion, and Chicago-style pizza to consider attending the next Science Cafe, held on the 3rd Monday of each month. Learn more here: https://www.facebook.com/ServingScience
So, ON TO THE SHOW (ARTICLE)
When humanity first embraced the potential of computers and sought out to create artificial intelligence, we were immediately faced with the reality that we don’t really know much about our own intelligence. It is kind of hard to replicate something if you don’t understand the original. Because of this, the pursuit of artificial intelligence has ironically brought more progress into understanding the genuine article (the human brain) than it has to creating an artificial one. Here are five big things we have learned about the brain and how we think.
So computers have learned to beat us at Chess and Jeopardy, but they still can’t beat us in the amazing feat of reading the handwritten address on an envelope. The human brain is the most powerful pattern finding machine on the planet, if not a bit too powerful. It is so passionate about finding patterns that we even find faces of Jesus and Elvis in food. We have the ability to find correlations and coincidences everywhere, even if they aren’t there.
Most research and development in artificial intelligence today is in the area of pattern recognition. Technologies such as Siri (Apple’s voice recognition), Google search, and OCR (optical character recognition) which is used in the popular Evernote are all great examples of AI pattern recognition being put to work. Creating the equations to find connections within chaotic information don’t just teach us about AI, but about how we think and process information ourselves.
If you are a Star Trek fan, there is a good chance you are familiar with the phrase “neural net” which is used often in reference to the remarkable android named “Data.” Without getting technical, a “neural net” is any effort to imitate the ability of the human mind to approximate solutions. You see, while computers think in terms of “yes and no” the human mind is one giant “maybe.” We have the ability to identify something as “more this than that” while computers, by default, need to be specific.
Learning to reproduce this ability has taught us a lot about how our minds think. For example, we have come to appreciate how much our brains use experience and context to sort out “fuzzy” information. For example, the only reason you can recognize the captchas below is because you have experience with the English language and its usage in context. If your only language was Mandarin, the below images would look like mere doodles.
Many AI theorists have stated that both the extreme quantity of raw experience as well as the granular nature of it makes it almost impossible for programs to perform this function as well as we do. It is like how your parents don’t understand the “group language” you develop with your friends, they are human but they don’t have the same background and experience. Without some kind of learning and live experience, computers won’t have the same “data” we do.
Most of the time we complain when we experience internal conflict. It stresses us out to be “of two minds” on something. Even culturally, we often value the appearance of single-mindedness and self-assuredness in others. However, the reality is that it is the ability to doubt and be in conflict which makes us so adaptable.
The largest breakthroughs in self-learning and motion adaptability in AI, largely in robots, has been around giving machines the ability to consider and then resolve conflicting information. To do this, AI programming has left the world of “linear thinking” a long time ago. Instead, the most advance AI today is a combination of multiple layers of “minds” which all work to resolve different information.
For example, researchers of Freie Universität Berlin, of the Bernstein Fokus Neuronal Basis of Learning, and of the Bernstein Center Berlin and have developed a robot based off the minds of bees.
The robot contains an internal “Id” brain which uses color to make decisions by priority and an external “Ego” which monitors the success and writes new processes to adapt. These “two minds” produce a learning process. [I am adding the “Id” and “Ego” labels, the scientists used words like “mini brain.”
Since Freud introduced the idea of the Id, Ego, and Super-Ego we have been seeking to understand why we have such conflicting internal motivations. As it turns out, we would be able to survive without them. Having constant internal struggle is what allows us to change and adapt to circumstances. In fact, an argument could be made that intelligence is simply the ability to reconcile conflicting information into a favorable outcome.
So going back to the “neural net” concept, while computers need data and numbers to generate motion, the human brain “feels” information. Just think about shooting a basketball. A robot would either have the right calculations and make the shot every time, or it would miss every time. A human being, instead, can estimate motion to shoot the ball and grow an ever favorable ratio of hit to misses with experience.
It goes beyond the ability to process analogue input (our muscles and senses), it is also the ability to execute complex calculations from those inputs. In other words, we are taking in “fuzzy” information and then producing “fuzzy” sums to act on. The ability to do this is the greatest barrier to effective robots, and is the second biggest area of pursuit in the world of artificial intelligence.
In the TV series Fringe, the mad scientist, Walter Bishop, frequently states he believes the human brain is “infinitely capable” starting from birth. This claim is not without merit. While many animals are usually born with a healthy dose of instincts and quickly assume a competent library of motion, human babies are quite helpless. It is almost as if we are surprised to be human at all.
The brain has the ability to change in amazing ways. For example, the breakthroughs in neural interfaces for prosthetic limbs are NOT because we have learned to talk to the brain, but because we found out the brain can learn to talk to an electrical interface. As long as we can visually associate a mental process with a motion, our brain can grow the pathways needed to integrate into our natural impulses. Kinda cool, huh?
The challenge for AI then is to figure out how to find these “base patterns” of learning that can begin with very little data, like a baby, and work its way up. It could very well be that the human brain doesn’t even require a human body for function. We could probably adapt to just about any form with an electrical interface and sensory input. The big key is that the more “pre-programming” in the mind, the less the mind can learn.
ADDED NOTE: In my presentation and initial write-up, I connected being “un-formatted” with being “blank.” Another brain on this subject, Steven Pinker, has done of a good job of showing these are not the same. The brain is “un-formatted” in that it is highly adaptable to whatever environment it finds itself. However, we are born with inherent motives and compulsions which that adaptability is working to satisfy. Even better, those impulses are proving to be more altruistic than we first thought. I recommend Steven’s book, “The Better Angels of Our Nature.”
Depending on who you talk to, namely press vs. scientists, AI is either scary and imminent or terrible and primitive. The truth is more the latter. We know so little about how our own minds work that it is impossible for us to reproduce them any time soon. The biggest challenge is #5 - creating a brain that learns from nothing. Any current AI programs come “pre-loaded” with knowledge and experience we already have.
How learning happens when there is no experience to draw from and no “points of reference” is the great mystery. Not to mention the great mystery of how human being evolved to have less instinctual or “pre-formatted” knowledge than other species instead of more. The truth is that the AI we are creating today are simple imitations of our brains most basic functions. There is still a lot more to discover about our own brains, not to mention artificial ones.
What I Wish Someone Told Me Starting Life as a Creative Professional
Greetings followers! In this episode we discuss the things I wish someone told me when I started life as a creative professional! Learn how to survive the harsh crazy world of business and corporate culture. Learn how to cover your ass when doing work for people. Most of all, learn how to keep all the stupid from getting you down.