Actionable metrics: Business associates deciding which KPI metrics are most useful.
This is another blog entry in our series on metrics.

A short while back somebody asked me this question:

We are helping a company to get more bang for their buck from their social media activities. Of course we also want to develop the necessary KPIs.
In your advisory services, do you have an approach you can recommend?

This blog entry addresses KPIs (key performance indicators).
We also address how one can avoid falling victim to vanity metrics instead of using actionable KPIs. The latter can make a real difference to your bottom line.

♥ Love what you read? Subscribe to our Blog!

Wine cellar: Inventory needed

I remember when, as a young adult, I worked in a very fine hotel with a great wine cellar that also had a store.

The cellar master told me that to find out what treasures he had in his wine cellar, it was best for us to do an inventory. But while counting bottles was okay, he assured me that was not what he was really after.

Of course, it was nice to know how many bottles there were of each brand and year. However, he was much more interested in learning which wines left the shelves the fastest and sold frequently. He was also keen to know how the various wine types compared when it came to customers complaining about a bottle having gone bad (i.e. had cork pieces when opened).

As the above suggests, his understanding of the term inventory or social media audit included “show me the numbers” – i.e. sales data.

Vanity versus actionable metrics: Navel gazing metrics are out.
Vanity versus actionable: Navel gazing metrics are out.

Knowing what insights we want to gain from a KPI helps develop the metrics that deliver the insights we want. As the wine cellar example shows, choosing insightful metrics makes a huge difference.

The above illustrates that besides counting bottles when doing an inventory or a social media audit, you must address such things as:

  • Which wines sell the most and are beloved by customers – For social media this means, which types of tweets or Instagram posts get the most likes…?
  • Which wines did people complain the most about after consuming the product (e.g., tasted bad) – For social media this means, which bloggers or Facebook users are most likely to complain / write negative entries about the brand…?
  • Which wines get many recommendations or word-of-mouth referrals – For social media this means, which types of tweets or blog entries get re-tweeted or receive many reader comments?

Clearly, the wine-making business and social media marketing have more in common than it would appear at first glance. In both cases, before you move forward you need to take stock. In turn, this allows you to gain insights into what you have already accomplished.

2. Effective KPIs depend on a clear objective

Besides taking an inventory of how good things might be right now, you need to know what objectives you must accomplish next quarter or during dinner.

Is the bottle of wine to woo a friend, impress your boss or just enjoy with your company?

To impress your guests it might suffice to simply purchase the wine that your favourite life style magazine recommended a while back.

Pageviews or likes on Instagram might not be the actionable metrics we want. These are like vanity metrics, i.e. we might feel good about large numbers, but they will most likely fail to move product from our shelves.

We need to decide what insights a KPI provides us with that will help reach our goals fast. To illustrate, Arsene Wenger (Arsenal football team’s longest serving coach) used a few metrics that have become legendary in the UK’s Premier League.

Of course, when considering paying to have a new player transfer to your club, you always want to check the medical data. If the player’s key medical indicators are satisfactory, you try to negotiate and hopefully they end up playing with your club.

But even when the medical data looked okay, Wenger was famous for also immediately checking the striker’s acceleration speed. Acceleration speed was a critial KPI on which he based his decision of whether to pursue a transfer or not.

Wenger was of the opinion that with great acceleration speed, the striker was more likely to win a one-on-one fight for the ball. In turn, this would increase the striker’s likelihood of winning many one-on-one contests. Whenever a striker won a ball this way, he could again use his speed to create situations that might result in another goal. Thierry Henri was one of the more famous examples where Wenger demonstrated the importance of this KPI for evaluating a striker’s potential.

Sharing content on social networks, reading content on your mobile.
Sharing content on social networks, reading content on your mobile.

What does the Wenger example tell us in the context of social media marketing? For starters, we need to decide whether we are dealing with:

  • consumer goods or capital goods, or
  • business-to-business (B2B) or business-to-consumer (B2C) situations.

Influencer marketing might work with fashion or luxury items, but paying US$ 40,000 or more for an Instagram post does not necessarily correlate to more sales. Without tracking the result with a URL and discount code, we might get many views but zero additional sales.

In the B2B context, a blogger with expertise in the business you are in (e.g., robotics) might be a good strategy. Here, Instagram posts might be a waste of resources.

In short, if your goal is to sell screws and bolts, try to assess if your KPI has any correlation with a desirable outcome, such as higher sales or more repeat sales.

Your focus could be on increasing awareness of your product or brand with your B2B target audience. Regardless, you want to find a KPI that helps measure this. One desirable outcome of your marketing activity on social networks might be you getting more requests for information or new subscribers to your newsletter, and so forth.

♥ Please share this news entry about KPIs and their best use in social media marketing on LinkedIn, Snapchat, Twitter, etc. using this URL: https://blog.drkpi.com/?p=5794 Many thanks! ♥

What is your opinion?

Incidentally, we have not discussed what to look for when purchasing a wine. Any wine connoisseur will tell you that what year and time of year the grapes were harvested matters. Many more factors can be considered for determining how well the wine might taste after it is ready to be sold. Of course, if you want to guzzle the very cheap stuff, this may not concern you at all.

Similarly, you must answer these two questions in social media marketing:

  • what target audience do you intend to reach, and
  • what content will you produce and share on social networks?

Navel gazing or vanity metrics are not very helpful. The KPIs must permit you to gain insights. They must help you improve against yardsticks, such as:

  • number of customers, and
  • amount of sales per client.
Unless you measure for impact, why measure at all?
Love what you read? Click here to Subscribe to our Blog!

Business person reading the insightful DrKPI report full of actionable metrics.
Business person reading the insightful DrKPI report full of actionable metrics.

We love to hear from you!

  • Do you have KPIs that you have used in social media marketing across projects?
  • What KPIs do you use in the B2B versus B2C context?
  • What is your best KPI in a consumer product versus a capital good (e.g., machine) context?
  • What questions do you have about KPIs?
  • What do you like or dislike about KPIs?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=5794

Leave a comment and share your thoughts.

The author declares that some of the companies mentioned herein are clients of CyTRAP Labs or subscribers of DrKPI® services.

Trying to hitchhike to get to your destination.

This is the fourth in a series of blog entries about the concept of blockchain.
Blockchain is a decentralised database that keeps track of all transactions between participants in the system.
Blockchains are intended to help sellers and buyers, for instance:

1. Counterfeits can be prevented from entering a company’s supply chain, and
2. Consumer scams can be stopped before they begin.

♥ READ about blockchain in German and on the Vault Security Systems blog

Blockchain possibilities

Nakamoto (pseudonym) stated that the objective of a blockchain was to provide users with:

an electronic payment system based on cryptographic proof instead of trust.

Interesting read: Nakamoto, S. (2008). Bitcoin, a peer-to-peer electronic cash system. Retrieved March 5, 2019 from https://bitcoin.org/bitcoin.pdf

The scope of use for such peer-to-peer crypto-currency platforms has grown considerably. Since the beginning, most blockchains have included five elements:

1. Anonymity of the blockchain’s users. This is accomplished by use of a public / private key pair. Each user of the blockchain is identified by the public key. Authentication is then completed by signing with the private key. This is neither a new procedure nor invented by blockchain.

2. Distributed but centralised ledger. Several transactions are stored together in what is called a block. Each block contains a part of the digital signature or hash of the following transaction.
The network of nodes (i.e. many computers) guarantee a unique order of transactions – for example, how they happened according to the timestamp, and validate the block of transactions.
The ledger contains all blocks of transactions. Once it is published on the network, it is immutable.

3. Consensus algorithm for mining (i.e. process of adding transaction records). This is a way to ensure all the copies of the ledger are the same. Each transaction must be approved by members of the community. Transactions are accepted when consensus between validating nodes has been reached.
This is expensive because it requires a lot of data storage and energy to maintain the system.

4. Single purpose focused. For instance, Bitcoin performs a single purpose only, i.e. to sell and trade its tokens. Such blockchains do not contain programming features to allow solving computational problems. The latter enables the blockchain to be used in a multi-purpose setting.

5. Trading of tokens. Tokens are used, for instance, to pay people who run mining operations that require much energy (see point 3). Investors or speculators buy and sell tokens to benefit from market up- or down-swings.
Transactions involving these tokens are stored on the ledger.

The above describes a blockchain such as the one used by Bitcoin to allow the trading of tokens. Its purpose is to maintain a ledger that accounts for who owns how many tokens. Moreover,

    1. owners of these coins remain anonymous,
    2. transactions cannot be reversed once they haven been executed, and
    3. if one loses one’s private cryptographic key, the tokens cannot be recovered – i.e. they are ‘lost’.

Interesting read: Apple co-founder Steve Wozniak discovered that point 2 applies when he had $70,000 in Bitcoin stolen after falling for a simple, yet perfect, scam.

Lots of experts do not like such single purpose platforms, especially if they focus on trading tokens only. For instance, Bruce Scheiner wrote in February 2019:

“Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government backed currencies, and criminals who want a black-market way to exchange money.”

Blockchain - a single one will not do.

Blockchain – a single one will not do.

What now?

The above illustrates that single-purpose blockchains may not be that useful to businesses to protect their supply chain or provide additional data services to their clients. To illustrate, in the enterprise or global trade context, programming features need to be offered in order to process various computational problems in the blockchain.

watch the WEF Davos interview on bloxlive.tv here

Another reason why single purpose blockchains are not useful for companies is that if clients have an issue, nobody is there to mediate the dispute. In most business applications, it seems most feasible to implement a combination of features of a consortium / private-type blockchain to better protect and manage data, as well as goods and services being traded.

Table 2 – Checklist: Deployment Models for a Blockchain
Type Access Key Characteristics Typical Use Cases
Public Unrestricted Distributed (multiple copies, immutable), consensus algorithm and currency (i.e. token) Cryptocurrencies,   general purpose
Consortium Restricted to consortium members (public may have read-only access) Immutable and distributed Consortium-specific cases, such as trade between members
Private Restricted to single entity, read-only access can be public / unrestricted Internal audit, database management, supply chain within corporation and its subsidiaries

Note. Adapted and expanded upon from Uhlmann, Sacha (2017). Reducing counterfeit products with blockchains. Master Thesis, Univ. of Zurich. Accessed 2019-01 at https://www.merlin.uzh.ch/contributionDocument/download/10024

Case 1

To illustrate, a replacement part is shipped from the original manufacturer. Each time the part enters the warehouse of the next party in the distribution chain, this is added to the block of transactions (e.g., wholesaler, importer). The final transaction occurs when the mechanic replaces the defective part in the car with the new, genuine one. Once this final transaction is stored on the block, the block is completed and digitally signed. The block is now ‘closed’.

With this block of transactions, the car owner now has proof that the defective part was replaced with a genuine one – not a fake. On this blockchain, both parts are being tracked, as well as work provided by the car dealer and the repair shop. Reselling and other car servicing data will also be stored on the blockchain.

In short, a single purpose blockchain will not be the best strategy. Only a multi-functional one will permit all these different types of transactions to be stored safely on the blockchain.

Interesting read:  Tabora, Vince (2018-08-04). A blockchain is a database, unfortunately a database is not a blockchain explains differences nicely.

Remind me when I have to take my car in for service. Original parts only...

Remind me when I have to take my car in for service. Original parts only…

What is your opinion?

Love what you read? Click here to Subscribe to our Blog!

Distributed ledger technologies are collectively known as blockchain. Blockchain is a decentralised database that keeps track of all transactions between participants in the system. Several transactions are stored together in what is called a block. These are connected to other blocks in chronological order according to their time stamp.

Any corruption of the chain of transactions after consensus was reached will quickly be discovered, because the corruption of this chain of transactions is visible. This also makes a blockchain very safe against fraudulent activity.

While they offer great opportunities, we have to separate the wheat from the chaff when it comes to blockchain hype. We hope this blog entry helps you in that process.

What do you think?

  • Do you have experience with crypto tokens?
  • Is your company trying to use blockchain technology to make its processes faster, more efficient or transparent for its customers or suppliers?
  • What questions do you have about blockchain?
  • What do you like or dislike about blockchain?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=4904

Leave a comment and share your thoughts.

The author declares that some of the companies mentioned herein are clients of CyTRAP Labs or subscribers of DrKPI® services.

Fake bags being sold at the beach promenade in Barcelona.

This is the third in a series of blog entries about the concept of blockchain. For most of us, the problem is all too familiar: a fire sweeps through someone’s home, reducing their treasures to ashes.

The worst is when that person finds out that, not only have the much-loved treasures (whatever they may be) gone up in flames, so have their documents of ownership, tucked away in a drawer in the same home. Proving their ownership rights to the insurer now becomes considerably harder.

But the same can happen when somebody robs you. As Arman Sarhaddar, CEO of Vault Security Systems AG (with its iVAULT brand of products) explains:

These days, in some places not even your locked and supposedly guarded storage space may be safe. That happened to me – when I returned, my valuables and personal items were gone.

The above example is one case where blockchain can help the consumer, and even the insurer. Many more applications are also feasible. We explain some of the technical issues below.

1. What are we trying to accomplish?

The blockchain can help answer the important questions listed in Table 1 below.

Table 1 – Checklist: What challenges do we solve with the blockchain?
What are we trying to do? What value do we want to capture? For whom is this of use?
Record the transaction Information and knowledge about what changed hands Clients
Track the transaction Attribution and who is responsible Suppliers
Verify the transaction Access to records or permission to view them Manufacturers of goods
Aggregate transaction Ownership Creditors or investors
Reputation and trust Public agencies
Contracts Employees
Transaction ledger

Table. Adapted and expanded upon from Felin, Teppo and Lakhani, Karim (Fall 2018). What problems will you solve with blockchain. MIT Sloan Management Review, p. 36. Retrieved 2018-10-20 from http://sloanreview.mit.edu/x/6015. See also https://blog.drkpi.com/show-me-the-facts-1/

A blockchain attempts to maintain a permanent, trusted database, which the owner, and trusted advisors and manufacturers have access to only with a secure key. In turn, history and proof of purchase, the provenance of works in a collection and all related legal and insurance documents can be held on a blockchain.

However, before you decide to use a blockchain, it helps to address the questions outlined below:

  • Do multiple parties share data?
  • Do multiple parties update data?
  • Is there a requirement for verification?
  • Can intermediaries be removed and reduce cost and complexity?

If you answered yes to three of the above questions, then you have the potential to apply blockchain.

Blockchain technology - What kind of blockchain is best for me?

Blockchain technology – What kind of blockchain is best for me?

2. Privacy

The traditional blockchain paradigm is complete transparency. Business applications, however, need to meet certain privacy criteria.

Not all transactions should be visible to everyone. The reasons for this may range from concerns of commercial confidentiality, to legal requirements.

Regulations, such as Europe’s General Data Protection Regulation (GDPR) simply make it impossible for companies to make all data accessible. Instead, some information, such as a patients ID number, must be protected.

Thus, any enterprise blockchain platform should provide an extensive set of privacy features. Only then, can GDPR compliance be assured (see this resource page from MC Lago – checklists and forms that help)

3. Security

Another requirement, closely related to privacy, is security. Businesses usually need to prevent data theft at all costs. They also need to ensure all actors are clearly identified. Again, this necessity might be imposed by the business case or by regulations.

Thus, enterprise blockchains need to implement authentication features and control who can participate in the network.

Security, Safety, Privacy, and Data Protection: Vaultsecurity.ch to the rescue.

Security, Safety, Privacy, and Data Protection: Vaultsecurity.ch to the rescue.

4. Transaction throughput

As Table 2 below illustrates, public blockchains may have advantages, but transaction throughput and energy consumption levels may not be to everyone’s liking.

Enterprise applications are usually transaction-intense and need to be scaled in terms of transaction throughput.

At the other extreme, public blockchains need to be scaled in terms of the number of nodes that can participate in the consensus protocol.

In most enterprise applications the number of validator nodes can be relatively small: for example, one representative per company participating in the consortium. Thus, transaction throughput can be prioritised.

Hence, enterprise applications may not be public. Instead a combination of features of a consortium / private-type blockchain may be used.

Table 2 – Checklist: Deployment Models for a Blockchain
Access Key Characteristics Typical Use Cases
Public Unrestricted Immutable and distributed Cryptocurrencies,   general purpose
Consortium Restricted to consortium members (public may have read-only access) Immutable and distributed Consortium-specific cases, such as trade between members
Private Restricted to single entity, read-only access can be public / unrestricted Internal audit, database management, supply chain within corporation and its subsidiaries

Note. Adapted and expanded upon from Uhlmann, Sacha (2017). Reducing counterfeit products with blockchains. Master Thesis, Univ. of Zurich. Accessed 2019-01 at https://www.merlin.uzh.ch/contributionDocument/download/10024

By the way, the video below shows in a straightforward way how the blockchain principle can work for you and that its foundations – asymmetric cryptography and distributed systems – have been known for decades by computing science researchers.

Also check out iVAULT on bloxlive.tv – Interview at #WEF2019

Love what you read? Click here to Subscribe to our Blog!

5. What is your opinion?

Distributed ledger technologies are collectively known as blockchain. While they offer great opportunities, we have to separate the wheat from the chaff when it comes to hype. We hope this blog entry helps you in that process.

What interests us, however, is what you think:

  • Do you have experience with crypto tokens?
  • Is your company trying to use blockchain technology to make its processes faster, more efficient or transparent for its customers or suppliers?
  • What questions do you have about blockchain?
  • What do you like or dislike about blockchains?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=1990

What will the future bring? Nobody knows but we want to be part of it.

Blockchain has become the buzzword of the year 2018.
Apparently, simply adding it to a start-up elevator pitch helps convince more people that they should invest.
But do investors understand what blockchain technology is about?

This is the first blog entry of a series of posts regarding Technology, Innovation and Management #ccTIM.
The main question is, why should I use blockchain in marketing or sales of a Fast Moving Consumer Product (FMCP)?

The fact that people are not always sure what it means is illustrated by Absatzwirtschaft, a monthly publication. Its October 2018 issue carries a special section on blockchains. While it explains a few things and lists important facts, some portions remain confusing to the uninitiated.

This blog entry will clarify some facts about blockchain for you.

Understand what matters

Blockchain allows a transaction to be permanently recorded on a database shared between computers, without relying on a third party to authenticate or process it.

What makes it attractive for consumers as well as companies is that immutability and security are written into blockchain. As well, because no single authority is in charge of the ledger, no one may remove entries or fiddle with them.

Here are three examples:

  • Bitcoin, a cryptocurrency that wants to eliminate the middleman in finance, such as banks.
    It runs on a blockchain that has been used since 2009 to underpin the working of the currency.
    Bitcoin offers one particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments.
  • Ethereum aims to bypass online giants such as Amazon, eBay and Facebook.
    It wants to achieve this laudable objective by allowing automated agreements to guarantee users a service.
  • Vaultsecurity.io aims to help those who suffer a break-in or a fire in their home.
    Vaultsecurity creates a permanent, trusted database of valuables that anyone may access with a secure key. In turn, selling lost or stolen goods becomes very difficult, if not impossible.

Bitcoin blockchain is used to track ownership of digital currency (bitcoins). In contrast, Ethereum blockchain focuses on running the programming code of any decentralized application. Other open source systems include Hyperledger, which has five projects.

In contrast to Ethereum, Hyperledger Fabric (one of the five projects mentioned above) provides different roles to the participants within the network. Examples are Peers (e.g., customers), Endorsers (e.g., a jewellery store), and Orderers (e.g., a manufacturer).

The internet is to email what a blockchain is to Bitcoin or Vaultsecurity. A big electronic system, on top of which you can build applications. Currencies, such as bitcoin, are just one possible application.

[su_table]

Blockchain depends on distributed computing and cryptography.

Blockchain depends on distributed computing and cryptography.

Key questions for designing a blockchain are listed below. We need to figure out what we are trying to do, the value we want to capture, and for whom this is useful.

What are we trying to do? What value do we want to capture? For whom is this of use?
Record transaction Information and knowledge about what changed hands Clients
Track transaction Attribution and who is responsible Suppliers
Verify transaction Access or permission to records Manufacturer of goods
Aggregate transaction Ownership Creditors or investors
Reputation and trust Public agencies
Contracts Employees
Transaction ledger

Table. Adapted and expanded upon from Felin, Teppo and Lakhani, Karim (Fall 2018). What problems will you solve with blockchain. MIT Sloan Management Review, p. 36. Retrieved 2018-10-20 from http://sloanreview.mit.edu/x/6015 see also https://blog.drkpi.com/show-me-the-facts-1/

[/su_table]

Besides the more general questions above we feel it is necessary to answer the seven questions below.

Answering these questions is critical

Before you start considering working with a blockchain, it is advisable to answer seven questions that will help you decide whether a blockchain is the best way to go (listed below).

[su_box title=”7 questions to be answered before developing a blockchain” box_color=”#86bac5″ radius=”9″ class=”aligncenter max-width: 700px”]

  1. Do multiple parties share data?
    Example: Manufacturer, distributor, and retail customer.
  2. Do multiple parties update data?
    Example: Customer updates sale to another collector, both inform distributor and manufacturer.
  3. Is there a requirement for verification?
    Example: Manufacturer doing repairs wants to know if person claiming ownership of an asset does rightfully own the asset.
  4. Can intermediaries be removed and thereby reduce cost and complexity?
    Example: Can Amazon, eBay or others be avoided to possibly save costs, and keep customer data to ourselves.
  5. Does a blockchain possibly help comply with, if not exceed, General Data Protection Regulation (GDPR) (2018-05-25) and the California Consumer Privacy Act – Assembly Bill No. 375, CHAPTER 55 (2018-06-27) requirements?
    Example: Can a wealthy client protect their assets while being assured their identity is protected from general public knowledge (e.g., public figure or movie star).
  6. Does the blockchain help reduce trade in stolen goods and fake luxury items?
    Example: How can a potential buyer be sure that jewellery, antiques, or a luxury product are not stolen or fakes?
    Recording, tracking, verifying, and aggregating of information about an asset can further reduce the risks as outlined here.

[/su_box]

Resources: Microsoft, DrKPI, #MCLago White Paper about the GDPR (Tools) Data Protection

With blockchains, no single one-size-fits-all approach is useful.

Cyberspace and Security: Blockchain

Cyberspace and Security: Blockchain

Initial Coin Offering (ICO): One way to use a blockchain

The scalability and user-friendliness of some applications may not be satisfactory. For instance:

  • Ethereum can currently process fifteen transactions per second, while
  • Visa can handle 45,000 transactions per second.

The main benefit of using blockchain is for recording, tracking, verifying, and aggregating of information.

For instance, Initial Coin Offering (ICO) requires a transaction ledger to allow a company and an investor to take advantage of an alternative fundraising mechanism. With an ICO, a start-up can issue their own crypto tokens and get needed capital.

One main difference between an Initial Public Offering (IPO) and an ICO is that the latter is similar to crowdfunding with two differences:

  1. No fee has to be paid to a platform like Kickstarter for the amount being raised, and
  2. token holders do not own any equity in the company but may get the product faster or be paid with product. The company has no real obligation to the contributor to deliver on their promises (ICO example, Lake Diamond CNN video – YouTube).

Lake Diamond uses an Initial Coin Offering (ICO) to raise capital without forcing the founders to give up equity.

Lake Diamond uses an Initial Coin Offering (ICO) to raise capital without forcing the founders to give up equity.

What is your opinion?

Distributed ledger technologies are collectively known as blockchain. While they offer great opportunities, we have to separate the wheat from the chaff of hype. We hope this blog entry helps you in this process.

Have these explanations helped you so far? Feel free to leave a comment below.

  • Do you have experience with crypto tokens?
  • Is your company trying to use blockchain technology to make its processes faster, more efficient or transparent for its customers or suppliers?
  • Are you planning to use a blockchain as a customer soon?
  • What do you like or dislike about blockchains?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=4689

Developing an expert system: Much work, many challenges, challenging job. | Copyright iStock 912613902

Artificial Intelligence (AI) is and has been on people’s minds for a long time. Advertising agencies and marketing experts talk about:

  • What does Artificial Intelligence mean for marketing agencies?
  • How Artificial Intelligence Is Revolutionizing the Digital Marketing…

Such titles promise much more than most of the blog or webpage entries deliver.

One of the criticisms of AI is that such systems are unable to ace an eighth-grade science exam. The main reason being that current AI systems:

“…[cannot go] beyond surface text to a deeper understanding of the meaning underlying each question, then use reasoning to find the appropriate answer.” (p. 63)

Schoenick, Carissa, Clark, Peter, Tafjord, Oyvind, Turney, Peter, and Etzioni, Oren. (September 2017). Moving beyond the Turing Test with the Allen AI Science Challenge. Commun. ACM 60(9), p. 60-64. DOI: https://doi.org/10.1145/3122814
Check out the video at the bottom of this post !

Read the rest of this blog entry to:

  • define what an expert system is;
  • show why Pinterest’s updates are based on an imperfect AI system;
  • illustrate the challenges of using AI to augment marketing;
  • watch an interesting video about AI and learning science further below; and
  • ask you for your feedback, input and opinions – join the discussion.

This entry is part of our series of posts on AI. To stay tuned and get the latest updates, including on AI and marketing, sign up for our newsletter.

This project is part of our White Paper project for the Competence Circle Technology, Innovation and Management #ccTIM from the German Marketing Association (Deutscher Marketing Verband).

This post continues our discussion entitled, What is marketing automation?

1. Definition of an expert system

In the 1980s, we were all interested in Decision Support System(s) (DSS) and expert systems. The use of AI garnered a lot of interest from the business press.

Using AI became easier, at least in theory, thanks to the rapidly decreasing costs of calculating or doing the arithmetic for ever larger data sets. This made it feasible to use many mathematical operations to gain insights into user and customer behaviour.

At the same time, AI systems represented the risk of amplifying implicit bias contained in the data sets they were trained on. In turn, some systems can make wrongful inferences or judgments about users. Below we attempt to define what an expert system is.

[su_box title=”Defining an expert system” box_color=”#86bac5″ radius=”9″ class=”aligncenter max-width: 700px”]

An expert system uses specialised knowledge and expertise from a human expert in a particular problem area and converts it into software code. With the help of such code, the expert system can emulate the decision-making ability of a human expert. It allows the system to perform at a level of competence that is better than that of non-expert humans.

Expert systems are part of a general category of computer applications known as artificial intelligence.
Expert systems can be used to diagnose patients, to put together a system that identifies fake news, and so on. Difficulties can arise when interpreting results produced by “black box” systems whose workings are often hard to analyse.

Edward Feigenbaum is seen as the father of expert systems.

See also definition by Encyclopaedia Britannica.[/su_box]

Of course, in cases where decisions can be clearly defined with one or even many algorithms (i.e. mathematical operations), we expect expert systems, and thus computers, to take over most of the tasks currently done by humans.

For an expert system to work well, two things are paramount:

  1. its rules and algorithms need to work properly, and
  2. the rules and decisions made need to be the right ones.

Hence, expert systems are often downgraded to represent expert support systems, which support humans in making better decisions. We define expert support systems below.

[su_box title=”Defining an expert support system” box_color=”#86bac5″ radius=”9″ class=”aligncenter max-width: 700px”]

An expert support system helps people solve problems. Like an expert system it allows the system to perform at a level of competence that is better than that of non-expert humans.

For instance, with Legalos, the user of the expert support system enters relevant information. The expert support system then uses this information and generates a template, for example a contract between a company and its cloud services provider. Here, the expert support system can provide the entrepreneur with several types of standard contracts very quickly. In turn, this helps keep a company’s legal costs down.

Another simple online expert support system is provided by Germany’s Federal Ministry of Justice and Consumer Protection. The service asks the user to enter some information pertaining to data processing and privacy measures. Based on this input it then generates a transparent data privacy policy as required by Article 12 of the General Data Protection Regulation (GDPR). This can then be slightly modified to fit the company’s particular circumstances.

See also: Luconi, Fred L., Malone, Thomas, W. & Scott Morten, Michael, S. (December 1984). Expert systems and expert support systems: The next challenge for management. Boston: MIT working paper #122, Slong wp #1630-85. Retrieved 2018-06-12 from http://dspace.mit.edu/bitstream/handle/1721.1/47478/expertsystemsexp00luco.pdf

[/su_box]

In general, an expert system must acquire knowledge from experts. Such insights are then applied to a large set of probability-based rules to make a decision.

By contrast, an expert support system still requires the human user to weigh some of the factors and then arrive at a decision.

2. Pinterest updates – more noise

Many companies use such technology. For instance, Pinterest and Instagram use similar AI to figure out what Pins you should check out on Pinterest or which Instagramers you should follow. Twitter operates the same way, and so does Facebook (see your newsfeed) or LinkedIn (whom you should connect with).

Recently, I got just such an update (see image below), suggesting that I go and check out 18 pins I should be interested in, based on my board #MCLago.

How on earth did Pinterest's "expert system" decide that these pins are relevant to my #MCLago board?

How on earth did Pinterest’s “expert system” decide that these pins are relevant to my #MCLago board?

3. When expert systems fail to augment marketing

As you can see in the image above, whatever criteria Pinterest used to determine what pins might be of interest to me, ‘common sense’ was not programmed into this decision-making process. How it concluded that I wanted to meet single men is a mystery to me.

Why I should care about Lipitor – a prescription drug – is unclear. Yes, I do post medical stuff, but primarily about minimally-invasive endoluminal or endolumenal surgery, because of my work with Lumendi Ltd.

On the upper left in the above screenshot you can see some people in a photo. The program concluded this from one of my recent pins. I had recently posted something – with video – about a Syrian refugee (the picture shows the trainee with her co-workers and bosses). So the thought was I would like another one. Well, here a deeper understanding of the meaning underlying the item I pinned would have allowed Pinterest’s expert system to find a picture in a similar realm.

Instead, it inferred that I would be interested in “Who’s In and Who’s Out for the Next Season of Nashville“. Seems a little ridiculous.

Basically, an expert system needs to be able to do more than do simple math. Moreover, predictions are not enough to automate the decision-making process or task with the help of AI (see Agrawal, Gans & Goldfarb, Spring 2017). Below, we list the six key things an expert system must be able to handle to get AI to deliver the most value.

Agrawal, Aja, Gans, Joshua S. & Goldfarb, Avi (Spring 2017). What to expect from artificial intelligence. MIT Sloan Management Review, 58(3), pp. 23-26. Retrieved 2018-06-12 from https://sloanreview.mit.edu/x/58311

[su_box title=”Expert system for automation: Performing these 6 actions is a must” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

An expert system not only executes tasks efficiently, but more importantly, gets a few things right, such as:

1. Data analysis: What kind of photos or status updates does this individual post?

2. Prediction: What action would the recipient take and / or would this potentially be of interest to the customer?

3. Judgment: Yes, this status update / photo is of interest to the user / customer.

4. Action: Include photos of interest and mail out newsletter to subscriber, user or customer.

5. Key Performance Indicator (KPI): The recipient has clicked on several of those 18 suggested pins. This expert system did better than average.

6. Quality of service: The pins the client clicked on provided content that represents added value for this user.

[/su_box]

Unless the expert system we use can do the above, marketing activities are more likely hampered than augmented.

4. Ultimate test: Does this content answer the question I am asking?

As pointed out above, whether the user clicked on several suggested pins is one possible KPI. For instance, I clicked on more pins than could be expected. Nevertheless, ultimately it is not the clicks on pins recommended to me by Pinterest that matter. Instead, the ultimate criteria for a user is whether those pins provide information that represents added value.

In my case, that did not apply. To illustrate, I checked out the pin about 10 KPIs in marketing, which brought me to a blog entry (see image below).

When an expert system cannot deliver quality: Pinterest recommends pins that mean little or nothing to me.

When an expert system cannot deliver quality: Pinterest recommends pins that mean little or nothing to me.

As the above shows, somebody is spreading her opinions regarding KPIs. We all know that the life cycle of a client is important, but if you are running a start-up, this could be of lesser importance than getting new clients who can help you pay the rent.

Strategising your sales revenue approach is interesting, but not something that everybody needs to do. Treating your clients respectfully and providing a service that they feel is worth the money they paid you most certainly helps. When it comes to revenues, that applies regardless if you track it with a spreadsheet or do it on a piece of paper.

5. What is your opinion?

The verdict is simple. The expert system that Pinterest uses to serve me weekly or more with an email of suggested pins does not do a good job. The recommendations it makes indicate that the AI system lacks a deeper understanding of the meaning underlying each pin I uploaded. In turn, it cannot source pins that might interest me.

But do not be fooled, neither Twitter nor Instagram do better with these things. Developing a well-functioning expert system takes a lot of work and testing.

However, the fact that expert systems do make errors was already pointed out by researchers in the 1990s:

Williams, Joseph (1990). When expert systems are wrong. In Proceedings of the 1990 ACM SIGBDP conference on Trends and directions in expert systems (SIGBDP ’90), p 661-690. DOI: https://doi.org/10.1145/97709.97761

On reviewing the challenges and benefits of expert systems and neural networks, things do not appear to have become easier in 2014, even though the benefits can be substantial (e.g., https://link.springer.com/article/10.1007/s10916-014-0110-5).

What I would love to know is what you think about these issues in 2018 (#ccTIM will continue updating you on this subject):

  • Do you think AI (artificial intelligence) will revolutionise marketing? Please explain why or why not.
  • Do you have examples of great expert systems, for instance in marketing, management or production?

The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. to the best of my knowledge, I got neither a freebie from any of the aforementioned companies, nor are they our clients).

Check out this video, worth watching – see quote at the beginning for reference to research paper that is source for video below.

Augmented marketing services can make our lives easier but automation can result in undesirable outcomes | Copyright: Death to Stock Photo, 2200

In short, is ordering your pizza online a result of the restaurant augmenting or just automating the sales process?
Structured, rule-based processes can be performed by robots.
Complex unstructured marketing processes that may result in different or unique outcomes are difficult to automate.
To illustrate, bento lunch boxes in Japan contain little portions of rice, fish, meat, pickles and other delicacies packed in plastic box. These items are extremely hard to grasp, thus automation is a challenge.
Here are the three answers marketers must answer soon to stay ahead of the pack.

♥ Curious? Join 1,500+ other subscribers to this blog’s newsletter and read on!

This article is part of our series of posts:

  • What is …. more follows soon

1. What is automation?

Doswell made a distinction in 1983 in his book “Office Automation” between tool and machine. In its basic form, a pencil is a tool. It cannot be used without the human writing or drawing with it. A typewriter is a machine that requires a human to use it, even if it is electric: a IBM Selectric typewriter.

Doswell defined a word processor as a programmable machine. The fact that it can function in part without a human working it results in automation.

In 1992, I wrote that the effective use of technology requires adjustments in an organisation’s structure, processes and workflows.

Today, we talk about automation, while we actually mean augmentation of services or tasks with the help of software code. We code certain steps or decisions that may result in algorithms that perform routine, rules-based processes. Of critical importance is that the outcome results in one single correct answer (i.e. a deterministic outcome).

But this situation often fails to apply. If I have a book’s ISBN number, I can soon tell my device at home to order this at my favorite bookseller. However, as soon as I enter an incorrect number, the outcome is no longer clear cut. For instance, the system could suggest the correct number, or else show me the name of the most likely author, title and so forth and I can decide if the book I want is listed.

Interesting readDoswell, Andrew (1983). Office automation (see p. 123). Chichester, UK: John Wiley & Sons.

Takeaway: Automation is a not a dichotomy but a continuum

Our understanding of what automation means is a constantly moving target.

In early 2016, Facebook used human editors to develop trending news lists. Some claimed these editors introduced a political bias. In turn, Facebook decided to automate this task and left the job to algorithms.

Later in the year Facebook discovered that algorithms cannot tell a real story from a hoax (i.e. fake news)… Facebook trended fake news.

2. Augmenting marketing services

The above illustrates that automating services is not easy. More often than not, only single tasks end up getting automated. Once things get complex, or several outcomes are possible, automation is very difficult to accomplish.

Automatic marketing services could fail either in unusual situations or in ways that produce unusual situations. The latter may be a tricky situation where various skillful responses may prevent a total disaster or only one specific response can, such as a pilot preventing a plane crash or a powerplant operator preventing a nuclear disaster like Fukushima or Chernobyl (see Tim Harford, 2016-10-11).

Neil Patel and Ritika Puri offer this definition of marketing automation:

[It] connects multiple touch points and marketing channels including social media, email marketing, and content marketing…
Marketing automation makes it easier to send personalized, 1:1 targeted messages. In other words, [it] makes communication stronger…
…Different marketing automation platforms are designed for different types of businesses… Act-On… comes with email, website visitor tracking, lead management, social media, CRM, reporting and analytics. A core value proposition is that business owners can execute their marketing from one place to (1) generate high quality leads and (2) transform those leads into sales…

The above definitions are all important, but they describe mechanisation of marketing processes. The results are what is called single outcome situations or deterministic outcomes.

For instance, you subscribe to a newsletter and get an opt-in email. In turn, you click on the link provided to confirm your signing up for the newsletter. This in turn triggers a thank-you note and so forth. Thereafter you are on the subscriber list and will receive the next published newsletter.

When using a chat box on a website, the operator or system may provide you with standardised replies for those questions that were previously listed in an FAQ (Frequently Asked Questions).

But instead of following these various definitions, it is better to focus on the characteristics of the marketing services that these tools are supposed to automate.

Takeaway: Augmentation still beats automation

By using machine learning we can improve industrial processes, marketing and customer experience.

Augmenting marketing processes is a far more common way to leverage technology than automation.

Interesting read: Lacity, M. C. & Willcocks, Leslie P. (Fall 2016). A new approach to automating services. MIT Sloan Management Review, Vol. 58(1), pp. 41-49. Retrieved 2017-07-31 from http://sloanreview.mit.edu/article/a-new-approach-to-automating-services/

Marketing automation at its best? "When the Going Gets Tough, the Tough Go Shopping" | Copyright: Death to Stock

Marketing automation at its best? “When the Going Gets Tough, the Tough Go Shopping” | Copyright: Death to Stock

3. The next five years in marketing automation

So where will we be five years down the road? How will automation of marketing services look?

Today, it is primarily defined using simple deterministic processes to define the term, such as:

Marketing automation involves a software platform that can be used to deliver content based on specific rules set by users.

Järvinen, Joel & Taiminen, Heini (2016). Harnessing marketing automation for B2B content marketing. Industrial Marketing Management, 54, 164-175. doi:10.1016/j.indmarman.2015.07.002. Retrieved 2017-08-08 from https://www.researchgate.net/publication/280875581_Harnessing_marketing_automation_for_B2B_content_marketing

Interesting read: National Science and Technology Council. Networking and Information Technology. Research and Development Subcommittee (October 13, 2016). The national artificial intelligence research and development strategic plan. Retrieved 2017-08-07 from https://www.nitrd.gov/PUBS/national_ai_rd_strategic_plan.pdf

This is the beginning. Algorithms in marketing may be alluring, but as Spotify’s music recommendations illustrate to us users, algorithms do not necessarily have our best interests at heart. They optimise things to enable the company to sell you more music – and so, make more money (see Brian Whitmann, former principal scientist at Spotify, December 11, 2012).

Takeaway: Manage your risk

Algorithms will get better but how much things will change nobody knows. Amazon’s two divisions – advertising and cloud-computing – have relied on self-service portals to attract new clients. New sales staff hires at these Amazon divisions in the second quarter of 2017 are the primary reason for the increase in the company’s headcount (from 351,000 to 382,400 at the start of quarter three).

Larger companies want personalised service. Their needs are too complex to be met by a self-service portal Amazon offers. The result is that staff has been hired to service large firms. When things get too complex, augmentation of services is the first step but automation is not always feasible.

[su_box title=”Marketing automation vs. marketing augmentation: 3 critical questions to be answered” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

1.  Is there a single correct answer?

Yes, the customer wants to download a white paper or a checklist.

Or, the individual passes a security check and may therefore enter the secure area, etc.

2.  Can we develop a set of likely answers?

In many situations there could be more than one answer as outlined in point 1 above (the ISBN – maybe the client switched two numbers). This means the answer is a no, but what if…

For instance, based on the user’s past order history, the system knows that this could be a book addressing marketing issues. Going through the database, two options come up where everything is correct as typed in by the client, except for the two switched numbers in the ISBN.

So the system responds in some way and shows the person the two possibilities including author, summary of book and cover. The client can then say yes to one or no to both options of books as presented by the system. A ‘No’ answer could then trigger two or three more options, and so on, hopefully resulting in the person ordering one or two products.

3.  What degree of agility is required for performing / automating this marketing task?

One outcome may be a less than optimal recommendation list of possible songs on a client’s playlist.

In the case of advertising business, adding sales teams will help Amazon attract bigger clients. The latter do not appreciate the self-service currently offered; their service demands are too complex, requiring humans to consult.

As factory robotics has taught us, robots lack the agility of humans. It makes little sense to have a self-driving truck, if it needs a driver to unload the contents with a forklift on arrival.

If we have a box with 3 products, pens, pencils, fountain pens, the robot needs to distinguish between them. Until robots are able to do such work, Amazon will continue to use humans to pick up products in its warehouses. [/su_box]

Getting things organised - marketing autmentation | Copyright: Death to Stock Photo Workshop 8

Getting things organised – marketing autmentation | Copyright: Death to Stock Photo Workshop 8

4. Have your say – join the conversation

Organisations can use marketing automation to generate multiple business benefits. Cost savings, better customer experience and better quality can be the result of such work.

But where agility is needed, automation becomes a challenge. Unless we can train robots in an intuitive way, rather than program each possible step, move and outcome (if x then do A or ask for B…), marketing automation is more likely to be marketing augmentation.

[su_box title=”What is marketing automation? THE definition” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

Sales focuses on the seller’s need to convert the product into cash.

Marketing focuses on satisfying the needs or solving the problems the client may have.

Content, affiliate, dialogue, permission and other marketing activities are just different parts of what marketing entails.

In turn, marketing automation tries to adjust an organisation’s structure, processes and workflows to optimise various activities such as content, affiliate, dialogue and permission marketing.

Going down memory lane, let us not forget

However, mechanising part of marketing does not mean with have done a terrific job.
Just think about direct marketing and software companies like Hubspot and the unnecessary things you receive daily in your letter mailbox or e-mail in-box.

As soon as things get complex, automation becomes tricky

In the early 1980s we talked about office automation. Today we have ever more people working at some kind of office. Even though things have been digitised we use as much paper as then to print…. and many things still need to be optimised further to reach an automation level that allows us to send staff to the beach.
We are still ways off having humanoid robots stand at our office door to take on our tasks.[/su_box]

But what do you think?

Source: What is marketing automation?

What is your opinion?

  • Do you think AI (artificial intelligence) will revolutionise marketing automation?
  • Do you have examples of great marketing automation with the possibility of multiple outcomes (probabilities)?

The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. I neither got a freebie from any of the mentioned companies nor are they our clients to the best of my knowledge).

Crowdsourcing consumers started in 2007 with getting them in creating selfie videos to asking them to design luxury watches today | Author : Rawpixel.com| Fotolia #88900750

Summary: What went wrong with content marketing during 2015 and 2016?
What are the 3 critical things you must do to produce successful content that creates buzz for 2017?

This blog entry is part of the DrKPI #Trends2Watch Video Series for 2017.

The series’ main focus is trends, without giving you a checklist to solve everything. Instead, we point out what went wrong and what things we must change to succeed next year. In fact, it’s best if you start implementing these suggestions right now, while putting together content for your next blog post.

♥ Curious? Join 1,500+ other subscribers to this blog’s newsletter and read on!

1. What is Marketing?

Marketing is often misunderstood as being the same as sales. However, marketing focuses on the needs of the clients. Theodore Leavitt put it as follows:

Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the cluster of things associated with creating, delivering, and finally consuming it.” – Theodore Leavitt (see https://hbr.org/2004/07/marketing-myopia)

Thus marketers must learn their customers’ needs and how the company’s current products satisfy them.

In turn, gaps can be identified and with the help of R&D, for instance, new products can be developed. The product can then be sold because it solves another important problem your client may have.

2. What is Content Marketing?

The above indicates that content marketing is also often misunderstood. Thus people produce content that tries to sell their product or put it in the spotlight.

However, good content marketing supports our efforts in general marketing. That means the primary focus for content marketing must be helping us understand customers’ needs. While redundant at first glance, content marketing supports our efforts for better understanding of what the client needs as part of our overall marketing strategy.

Content marketing focuses on clients’ and prospective customers’ needs and problems. It tries to address these by providing content that answers questions clients need or want answered. Good content provides solutions or new insights to issues or problems that matter to our target audience.

There is a large group of customers that appreciate content that solves real or assumed problems. An example is:

How to do your make-up in 30 seconds every morning

Content marketing addresses the needs of clients. This may be as simple as:

“How do I build my own bookshelves?” or
“How should I organize may sales activities each month?”

Of course, if your blog focuses on sustainability and the blog entry talks about aquaculture, your content is a bit more complex than if you explain the make-up bit. But if that is what your target audience needs, that’s the kind of content you want to try to create.

3. Improving our Content Marketing for 2017

In a customer support forum it is perfectly all right to talk about how to better use our product. The same applies in a product blog, where we update readers. For instance, we may have power users share their insights and tricks with others. We may also report about upcoming product updates or possibly workshops being held nearby for users of our software.

While the above helps with current clients, it may fail to attract potential clients. The latter do not necessarily want to know about our product or updates. Instead, their focus is on solving their own problem(s), such as:

  • how to shop for clothes that make you look great,
  • the 10 best restaurants in Torino, Italy, and
  • how to show how my content marketing helped our bottom line.

Some of these issues and possible solutions I point out in the video below.

VIEW the 1-Minute Video below for more details
Download the slides used in the video (500 KB PDF).

[su_box title=”3 takeaways: How to make sure your content provides value for your target audience.” box_color=”#86bac5″ title_color=”#ffffff”]

1. Avoid preparing generalised list content, such as “10 best tips…”.

Whatever it is, focus on providing added value or solving a problem that is of concern to your target audience. For instance, 3 points that help you make a better video than the one I made above. That will get my interest, guaranteed :-)

2. Talk with your clients.

  • What concerns do they have (“making sense of web analytics is tough”)?
  • What are their pain points (how to…) for which they would love to consume content (e.g., slides, video, blog entry)?

3. Get client feedback about your content.

You wrote about a problem, because of the input you got about the topic from clients (see point 2). After it is published, call your source and ask them for feedback about how useful the content is or what is missing. Even better, ask them to do so in the form of a comment on the post. You can then can reply to further help your audience.[/su_box]

4. Have your say – join the conversation

Source: 2017 trends: 3 rules for better content marketing

What is your opinion?

  • When was the last time you read interesting content on a corporate, fashion, music or hobby blog?
  • Do you like to get slides or checklists to download in a blog post?
  • What irks you the most when it comes to corporate blog content?

The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. I neither own any of these brands’ products nor are they our clients).

Short content with little depth will not do

These days we are inundated with data on our newsfeed, social networks (e.g., Instagram images), YouTube, etc. Some of us even read newspapers in digital or, surprise, traditional format.

Here is a short video from 5 marketing influencers (how did they become marketing influencers?), that talks about the evolving content marketing trends for 2017.

Six minutes in length, of which only 1 minute by 1 person provides this viewer with some value. That is a recipe for failure in Content Marketing for 2017. It also means that those that supposedly know may not know that much more than you do. Pity.

If you have not already done so (of course you have!), please make sure your content for 2017 has added value for your clients :-)

 

Guess who says something that makes sense in the Content Marketing Trends Video for 2017.

If you watch this video and have the feeling that you now know what 2017 will bring (i.e. challenges or opportunities for those creating content), you are way ahead of me – so please share!

, , Drinking Red Bull boosts job performance
Math-myopia and Prince Harry: do these numbers from Red Bull about performance enhancements make sense?

Will drinking Red Bull and smoking cigars boost our productivity at work?
Will sleep deprivation increase the number of mistakes we make?

This post addresses these questions, as well as how math-myopia affects love for metrics and statistics about sports, dieting, work injuries and so forth.

This blog entry is part of our series on business analytics and big data

If you read German, check out our series on political campaigning and the usefulness of polling (US presidential election).

[su_box title=”Table 1: Keep the numeracy problem in mind” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

1.1 Making a good guess: Avoid base rate neglect

When we combine two pieces of information, we tend to ignore one of them completely. This phenomenon is called “base rate neglect”. For example, the base rate tells us how many people are affected by bowel cancer (6 out of 100), or how many have a fatal injury at work (i.e. 142 deaths per year in the UK – a rate of 0.46 deaths per 100,000 workers).

Knowing the base rate helps put things in perspective.

1.2 Our culture makes it acceptable to say, “I do not do numbers.”

Imagine a study that presents a test that is 75 percent accurate. In 25 percent of the cases where the test predicts a self-reported injury at work will happen, it does not. This is called a false positive.

What is the chance that the person has a work-related accident? Intuitively we might say that in 75 percent of cases a fatal accident will occur. However, the correct answer is, ‘we do not know’ – unless we have the base rate.

To illustrate, if we test 100 people and 4 come out positive, 3 were rightfully identified to likely have a work-related accident and 1 was wrongfully identified. But wait! Of the 96 others, 24 (= 25 percent) will have a false positive. This means we predict a non-fatal work injury, but they will not have one.

[/su_box]

Unfortunately, in a culture where Prince Harry can publicly state that he may not have the math skills to be an air ambulance helicopter pilot, he is likely to ignore the base rate…

The base rate is a good way to start if we want to forecast something or put test results in perspective (see Tables 2 and 3 below).

Below we illustrate this a bit more with an example based on a May 2015 Financial Times article, which nicely illustrates how things can be misconstrued by journalists.

To reduce this risk, we must go to the trouble and check the numbers.

Financial Times gets the ball rolling

[su_custom_gallery source=”media: 1986″ limit=”7″ link=”image” target=”blank” width=”531px” height=”130px”]

Great headline. Unfortunately, the FT journalist fails to refer us readers to the original study from which she got these numbers.

I left a comment, asking author and Employment Correspondent Sarah O’Connor for help.

[su_custom_gallery source=”media: 1984″ limit=”7″ link=”image” target=”blank” width=”441px” height=”234px”]

My comment (see above image) did not get published, nor did I get an answer from the journalist regarding my query.

So as a paying subscriber, should I trust these claims? Might it be wiser to go and check?

You guessed, I continued digging myself. An interesting journey that took me 28 minutes…

The Daily Mail

I found an article from the Daily Mail (see image below).

But it referred to an earlier article by Mail staff referring to a study by Uppsala University (Sweden) researchers.

References? None whatsoever!
[su_custom_gallery source=”media: 1987″ limit=”7″ link=”image” target=”blank” width=”492px” height=”368px”]

So where did the Financial Times’ (FT) journalist find the information if not from the Daily Mail?

Huffington Post links to FT

The Huffington Post managed a link to the FT article from which it had copied. In other words, to avoid copyright infringement the journalist had done a fast re-write. The content was the same as in the FT article using different wording.

[su_custom_gallery source=”media: 1988″ limit=”7″ link=”image” target=”blank” width=”471px” height=”337px”]

So the Huffington Post failed to add substance to what was posted in the FT. What now?

Vitality Health Life – study cannot be found

You might suggest as a good next step to go and check whether the sponsor of a study might offer the full report. That is what we did.

Unfortunately, the sponsor’s website did not make it easy – it failed basic usability requirements. After some digging we found something, but it did not link to the original or complete report either.

You got that right, the sponsor did not provide the full report. Just a bit of information and nothing more. Real bummer.

[su_custom_gallery source=”media: 1985″ limit=”7″ link=”image” target=”blank” width=”490px” height=”349px”]

Do another organic search

Maybe a search with different keywords could help? Read on and find out. Incidentally, why not subscribe to this blog’s newsletter right now?

[su_box title=”Table 2: 6 things we must do to make sure the numbers add up” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

2.1 Go search for the original (see organic search data in image below)

This got me the link to the Rand Corporation. Here something was written up about the study. But once you have the original study, read it carefully, including the method section.

2.2 Read the method and result section carefully

To illustrate, I recently read:

Murray, Sarah (2016-02-26). Frustrated US workers go it alone. Freelancing. Work is becoming more flexible but less secure. Financial Times, FT Executive Appointments. Employment Global Best Practice. Retrieved, Feb. 27, 1026 from http://www.ft.com/intl/cms/s/0/6030a0dc-d0b2-11e5-92a1-c5e23ef99c77.html

I went to the original study, Freelancing, and found another study where the authors do not provide a methodology section.

After reading such a study, make sure the following four questions are answered and if not, don’t make decisions based on such work:

2.2.a — How was the sample selected? No information given in the report!
2.2.b –What kind of survey was used? No information given!
2.2.c — Were participants interviewed using an online survey? No information!
2.2.d — Was a combination of landline and cellphone random digit dialing samples used to get responses through interviews? No information!

If the report does not provide information regarding questions 2.2.a to 2.2.d, should I trust it?

Put differently, as a shareholder or tax assessor, would you trust the company’s financial statements if answers to such auditor questions were missing?

Certainly not, so why should you trust such numbers for an opinion poll? I rest my case!

[/su_box]

[su_custom_gallery source=”media: 1999″ limit=”7″ link=”image” target=”blank” width=”413px” height=”498px”]

Rand Corporation

A short description is offered and at the bottom a link to the report. Another page opens with another description about the study. Eureka – I can finally download the report.

[su_custom_gallery source=”media: 1989″ limit=”7″ link=”image” target=”blank” width=”489px” height=”268px”]

The report itself is very interesting. On page 11 it introduces the reader to the concept of abseenteeism and presenteeism.

– Absenteeism refers to the measure of days absent from work
– Presenteeism refers to the measure of reduced productivity while at work (e.g., due to headache, flu, etc.).

On page 12, it goes on to say, “The instrument consists of six questions with a recall time frame of seven days. The questions ask whether the respondent is employed; the number of hours missed from work; the number of hours actually worked; and the degree to which the respondent feels that a health problem has affected productivity while at work and affected their ability to do daily activities other than work. WPAI-GH outcomes are expressed as impairment percentages, where higher percentages indicate greater impairment and lower productivity. We use the following three work-related impairment percentages calculated on the basis of the WPAI-GH scale

– Per cent work time missed due to ill-health (absenteeism),
– Per cent impairment while working due to ill-health (presenteeism),
– Per cent overall work impairment due to ill-health (absenteeism and presenteeism).”

Hafner, Marco; van Stolk, Christian; Saunders, Catherine, L; Krapels, Jochim; Baruch, Ben (May 22, 2015). Health, wellbeing and productivity in the workplace. A Britain’s Healthiest Company summary report. Retrieved, May 31, 2015 from http://www.rand.org/content/dam/rand/pubs/research_reports/RR1000/RR1084/RAND_RR1084.pdf

What is the problem with the Rand study?

The survey depends on how well subjects recollect facts from last week. But do seven days in a person’s year accurately reflect the status of their health? Additionally, does it make a difference if we collected these data in July, October, December or February of the year we studied?

Finally, large companies are over-represented in this sample. Moreover, companies with under 50 employees – over 70 percent of British firms – could not participate.

So is this a great study? It is very interesting, but the journalists’ interpretation of these data far exceeds what the authors infer from their own data.

By the way, there is research that is far better suited than the above to learning how sleep deprivation can affect job performance or studying math.

[su_custom_gallery source=”media: 1993″ limit=”7″ link=”image” target=”blank” width=”445px” height=”179px”]

Lack of sleep increases risk of failure in school

Uppsala University to the rescue

Olga E. Titova, et al., (2014) Associations of self-reported sleep disturbance and duration with academic failure in community-dwelling Swedish adolescents. Sleep Medicine doi: 10.1016/j.sleep.2014.09.004 Retrieved May 31, 2015 from http://www.researchgate.net/…… (click on citation to get study link since it is too long to post here).

The study included 20,000 adolescents aged 12 to 19. This longitudinal study was conducted from 2005 to 2011. About 30 percent of participants reported regular sleep problems.

The study found that if you have less than seven hours of sleep, data indicate an increased risk of failure in school.

The group also found in a previous study that going without a night of sleep increased toxic substances in the brain. Possible increased risk of Alzheimer’s, Parkinson’s and multiple sclerosis was reported. Other prior research shows how the brain uses sleep to cleanse itself.

Interesting Reading

2015-07-20 – One night of sleep loss can alter clock genes in your tissues
2015-07-13 – Sleep loss makes memories less accessible in stressful situations
Three studies show that teens should decrease screen time before going to bed

Bottom line: Show me the data…

[su_box title=”Table 3: Does the story meet 2 critical benchmarks?” box_color=”#86bac5″ title_color=”#ffffff” radius=”5″ width=”px 700″ ]

1. Does the article provide the reader with a link to the original study discussed?

Every journalist does some research before writing their story. If the original material is available online, why not reference it? Saves your reader time and gives them a chance to read up on this interesting topic.

Hence, the printed article should provide a link to the original source(s). At the very least, it should refer to the online version of the article where links to the original sources are provided.

2. Does the study report provide the reader with a method section?

Explain succinctly how you did the study, such as:

“The analysis in this report is based on telephone interviews conducted February 18-21, 2016 among a national sample of 1,002 adults, 18 years of age or older, living in the continental United States (501 respondents were interviewed on a landline telephone, and 501 were interviewed on a cellphone, including 312 who had no landline telephone)….

A combination of landline and cellphone random digit dialing samples were used… Interviews were conducted in English and Spanish. Respondents in the landline sample were selected by randomly asking for the youngest adult male or female currently at home. Interviews in the cell sample were conducted with the person who answered the phone, if that person was an adult 18 years of age or older.”

Great read: PEW – information about our survey methodology

For those like Prince Harry, who claims, “I can’t do maths,” the above paragraph can be a lifesaver.

[/su_box]

If you read an article like the one for this post, better check the number to see if the headline by the journalist can be justified from the study’s results. Very likely it cannot, so putting decreasing amounts into content seems to only viable strategy left.

And to answer our question in the title: No study shows drinking #RedBull boosts job performance.

However, it does increase your daily sugar intake significantly, which is probably not a good thing.

Join the conversation

  1. Do you have an example of how mathematics phobia is affecting basic mastery of mathematics skills?
  2. Do you have a good example of a sponsored study that addresses some of the issues outlined here?
  3. How do you make good guesses about things that affect your decision-making (i.e. invest my money here or there…)?

Of course, I will answer you in the comments. Guaranteed.

Can we trust these numbers?

Interesting reads point out that trust is learned more than inherited. Trust is socially received and transmitted.

The truth about trust
Van Lange, P. A. M. (2015). Generalized trust: Four lessons from genetics and culture. Current Directions in Psychological Science, 24, 71–76.