Shaking the ground the Left stands on, & how to rebuild with innovation. First part of a series, analyzing the ALP.
First an analysis: Politics is in a pre-innovation stage in Australia and NSW.
The reason is the rise of technology, enabling new communication methods. A Kevin-Rudd 24/7 or Obama ‘yes we can’ campaign, using social media, profited from more the tools available than the contemporary alternate and regressive right approach (ie. stop the __, block the __).
This is being stood on the head by movements like the Tea Party in the U.S. are clearly orchestrated uses by a reform based party of the Right. The Greens too have benefited from social media technology, and true believers in Green Policy, who may historically know what they are against, but not what they are for. At least, until recently (thanks in Australia to Bob Brown who is a veteran politician now).
But social media is a tool. The Web is a tool. It’s a medium not a message.
Governments are in a new paradigm sparked by new communication tools, which capsized the balance between policy idea & policy implementation.
And social media is not the answer.
Innovation in politics.
Our hypothesis is that party that can implement and communicate change, and/or to actually deliver services is the party that wins.
The problem though is:
a) Poll method for measuring what voters care about is broken, when phone / mail use is shrinking;
b) Pyramid paradigm of all bureaucracies is being taken over by networked entities: e.g. GetUp! versus the Dept of XYZ. This means some public service is out-communicated and cannot respond nor implement;
c) Technology change means policies are outdated before they are implemented;
d) Finally, decision makers are reacting to old stereotypes of voters not new data metrics.
Being out-of-date it is delivering the worst results in the history of the Australian Left progressive cause.
In a time when the data would show a far stronger bedrock of support for social policies, the data break down of that support is wrong, hence the decision is wrong.
Where is the innovation?
The innovation element is missing, and voters are disengaging from Left parties, whilst being increasingly disillusioned with distribution of wealth and equity issues. A carbon tax and a resource rent tax would once have won broad support. In the Australia of my childhood, taxation and big government enjoyed big support, why not now?
Why not now?
Next in this series: Part 2: Electoral Trends — how Australia has changed and this change is forgotten.
COMPANY DISCLAIMER: I work for 2thinknow, and I/we have also earned fees consulting across government and business. We have at times editorialized also for a candidate on Left or Right (based on innovation potential), met Ministers of both sides, and assisted both Left and Right organizations.
Our innovation view is that political parties must have ‘differing views’ and that it is the tension and compromise between those views that can drives, improve and create innovation as positive change. This is the same view held by the U.S. founding fathers. At times, according to our innovation concepts, some parties and people will better drive innovation.
PERSONAL DISCLAIMER — My personal views are centrist — generally socially progressive who believes in business and markets, and that government action is possible in some circumstances and will succeed if based on the best data.
MIT on LinkedIn is running a poll on whether:
“Designers can be better business strategists than MBAs?”
So far 69% or around 2/3rds say yes on 126 votes. Here’s the Poll.
Whether this is a self-selection answer (i.e. designers self-select, and have more incentive to vote as they have more to gain) — it is interesting.
Below is my comment from the poll.
I attended AGSM MBA program, and found it valuable. But I also graduated from Visual Arts and worked in Design. Our firm, 2thinknow is based on the tension between design and economics. Our Innovation Cities Program integrates Cultural Assets, Human Infrastructure and Networked Markets. i.e. Arts, business, economics MBA / Design are complementary – but only in people who view the textbook on topics such as Human Resources with some scepticism, and question Friedman or Chicago School economics (alongside Keynes). Designers have the maverick spirit business management has the centrism needed to orient. I would tend to say it depends on the sector, which is better. Keep innovating, Christopher Hire Exec Dir 2thinknow ICP
I would add that design without a financial focus is problem not useful. And that having worked as a designer when younger (21-23 mainly), and as an analyst later I have found it is rare to wear both hats well.
Author Daniel Pink wrote MFAs are the new MBAs some time back.
As an innovation analyst for 2thinknow, I integrate design in my processes every day. So if I had to commit to answer, and had no room for explanation, the answer would be:
YES.
What would your answer be?
The primary causes of the GFC were not markets and capitalism. The primary causes of the GFC were monopolies and collusion.
(The GFC refers to the Global Financial Crisis — I am so used to the acronym in data, that the blank look I get sometimes when I use it, means I forget not everyone refers to the events of 2008 onwards — Lehman, Bear Sterns, U.S. / U.K. housing bubble — in the shorthand of ‘GFC’)
I have been examining data as an analyst for many years now, either within the walls of business or government, or publicly available data from semi- independent bodies (ABS, OECD, etc.).
I say semi-independent because they do have a ‘patron’ and that patron is people within their respective governments. So the independence of their data is possibly limited by the political masters who foot the bill for that data. By how you ask a question you define how you get the answer. As someone older and cynically wiser in these things from U.K. told me there are “only winners and losers”. Perhaps too true, but perhaps ideologically rather a ‘coal shaft’ statement — just try and find the canary there, let alone a ray of light out.
Causes of the Economic Crisis & GFC
So here’s my hypothesis. It was not shopkeepers and business owners who caused the global financial crisis. It was not mid-size companies or business-farmers (for farming is a business) on the land. And it was not even public servants (who are much maligned and duck for the exits every time an enquiry into their policies in a portfolio is announced, lest a sacrificial lamb be announced too).
Believe it or not some political advisers I have read / heard blame even the herd — for not consuming enough. Blaming the hoi polloi pre-dates the French revolution — and has the convenience of enabling you to extract a fee from those escaping blame. This was evident in the consumption driven recovery (and related Bernanke policies) which never eventuated in the U.S., but which financial analysts loved to talk about.
Sorry folks no independent data supports you in any of these biases in search of data. e.g. U.S. consumption led recovery in 2009-10 where? Agricultural over-supply depresses prices in an age of ethanol subsidies?
Monopolies / bureaucracies caused GFC.
What did act as the root cause of the global financial crisis, was simply this:
A powerful collusion of financial interests, and closing down of markets, which led to the evacuation of capital from productive uses.
The capital fled to government guarantees and safe havens (e.g. gold). Causing a reduction in money in the economy producing something, and funding innovation. Which was the topic of a PBS Newshour special segment during the height of the crisis (and an example of why some public goods like PBS/ABC/BBC can work, just as private goods e.g. Apple, Google work).
Monopoly capitalism is not capitalism.
What is less often commented though is that monopolies act like the worst excess of a controlling government. Monopolies control the price for goods and services, just as surely as government regulation, tariffs or other mercantilist tools.
A monopoly is a business that doesn’t act to maximize profit through operations, but other methods such as preventing market entrants or tax evasion. (There are valid reasons for a temporary or permanent monopoly, but these are fewer than supposed, and that is way too lengthy an issue to get in to here.)
So for example:
- Enron used financial chicanery. It did not make money out of electricity.
- Lehman made money out of money-shuffling not capital provision to the economy
- GM near failure made money out of finance, not vehicles
Businesses that do not serve a useful purpose to a customer (the market) should fail, but are too often propped up by many factors. Right now market darling Apple is not making the best hardware (arguably Nokia is), but Apple is making a ‘whole package’ that markets want.
It’s not that ‘business’ or ‘government’ are bad or good — for this is surely the most naive view of a sophomoric intellect. It is that excess bureaucracy — business and government — and tightly bound balls of string are bad. (Bureaucratic entities acts like tightly bound balls of string that just grow and grow, and when they unravel they tangle in with other bureaucracies).Worsening factor is that government bureaucracy tacitly tends to like to deal with business bureaucracy and business bureaucracy with government. So we have a very tangled web indeed.
When the 2 or more bureaucracies line up against the market to prevent competition (generally for some noble purpose) this is when markets fail. And when I say fail I mean economic under-performance like U.K., Australia or U.S.A. downturns of the past.
Yet ‘central policy’ and ‘co-ordination’ or ‘unity’ is often the proscribed solution of ‘experts’ in reports once you wade through to the final page. It won’t lead to innovation. It didn’t work for Harold Wilson, and Tony Blair’s centralist (and markedly incompetent) policies are partly responsible for the U.K.’s current mess.
Government can enable or disable innovation, but there is no central thermostat determining the ‘innovation economy’.
What’s next for the innovation economy?
There are threats to an Australian economy, and a potential U.S. economic resurgence that can be foreseen based on unemployment, resource usage, labor force, and other data.
But to achieve this success we must not look only at yesterday’s winners and say ‘how can we copy them’? For monopolies — be they government or business — fail. And if they don’t fail small and early, they fail too big.
The answer is innovation — and not some government funded lab. And the U.S.A. is already showing nascent signs of an innovation-led recovery, just like the internet boom or PC-boom or green revolution before it.
Which is why one starting point for many governments is independent and courageous tax reform, and other policy reform, which is so important to the economy.
But innovation is not (in most cases) the billion dollar project. It is far more affordable than that.
If you’d like to learn more about innovation in bureaucracies — with data, planning or training applied to your organization, to help create a process of change — contact 2thinknow
Keep innovating,
Christopher Hire
If you have questions about the innovation economy, ask me here or on twitter — @christopherhire . I’ll post my favorite questions here, and do my best to answer them.
There’s a Harvard Blogs piece (in the April 2010 edition of HBR) that gets the occasional airing.
The argument is that ‘copying is as valid as innovation’ — in short. I’m sure I do not agree ethically, economically and due to hard numbers. Read the article by Oded Shenkar here: http://hbr.org/2010/04/defend-your-research-imitation-is-more-valuable-than-innovation/ar/1
Here’s my rebuttal from the site:
Innovation requires returns to innovators in a market-based system.
Without returns to innovators you remove incentives for innovators.
You then reduce investment in innovation and get more bright people moving into ‘high paid’ but ‘low value’ professions. If you want an innovation economy, this is an irresponsible argument.
Is Baidu worth more than Google? Is every Lethal Weapon knock-off as valuable as the original series? Are returns the same? Investors in innovation find higher returns. Innately we sense a ‘pale copy’ of an original. It’s why ‘Coke’ is the ‘real thing’ — and that brand line has worked so long.
However incrementalism is worthwhile. Google, Apple & Microsoft have all done this. Breakthrough innovation is also valid, but rarer.
Our innovation models explain this, and Silicon Valley case studies show the concommitant returns from innovation.
My city benchmarking data research for 2thinknow convinces me of my view. But I am may be wrong. Convince me.
What do you think?
Keep innovating,
Christopher Hire
As is often said in politics, the only poll that counts is the one on election day.
Certainly, the data from long time polling shows a massive variability to poll day results. Poll data is obtained via survey of voting intentions. This uses a sub-set of voters
a) available
b) willing and
c) selected.
(New technologies are impacting polling accuracy too.) This sub-set forms a microcosm of the macrocosm of national voting intention when processed using statistical methods by each pollster.
So how do you read today’s Newspoll of ALP 30% support if you’re interested in the electoral data in Australia?
In general the further a poll gets into ‘bedrock’ support territory the more worried politicians get. So 30% is deep in bedrock. But that said, perhaps an analysis of the behavioural reasons might challenge that view.
Here’s 7 psychological insights in behavioural responses to change that may explain the poll result.
1) Carbon tax will raise cost of living (current issue)
2) Electricity companies ripping off consumers
3) Banks ripping off consumers
4) Supermarket/everything duopoly raising prices to support lower milk/bread prices (i.e ripping off consumers)
5) Lack of belief politicians will act on consumers being ripped off
6) Belief that politicians can act on consumer prices
7) Belief that politicians are acting to make prices more expensive.
The point: There is a deep suspicion that Left politicians want to raise the cost of living.
And, many intellectual hard-Left voters (university Marxists et al) have moved to the Greens (the Protest party).
It is not (just) the leadership of the ALP, it is about ‘policies that raise the cost of living’.
So the ALP is getting a 10-12% points protest vote about ignoring cost of living.
Actual support I believe would put the actual ALP support would put the support at 10-12% higher giving the ALP 40-42%, and Coalition around the same, with greens losing support as people examine their pay-packets. 2PP probably is closer towards 48% ALP, 52% coalition, but this may be misleading. (*)
Of course an alternate simplistic way to examine the Newspoll data is:
LEFT 30+15% = 45% (Labor + Greens)
RIGHT = 45% (Coalition)
In short where we were at the election. The data on the 2 party horse race is in other words tighter than one would think. Perhaps, it’s a 3 way horse race.
For the record, politicians can act to lower the cost of the living for the majority, can act to prevent asset bubbles, can act to regulate quality of goods and services (and prevent rip-offs). So the Greens may have a point…
Links:
Newspoll: http://resources.news.com.au/files/2011/03/07/1226017/334899-110308-federal-newspoll.pdf
Columnist: http://blogs.theaustralian.news.com.au/mumble/index.php/theaustralian/comments/newspoll_history_repeats/
[*Note this paragraph has been corrected at 8.44pm 8/03/11]
Which is more accurate? (The answer may surprise you.)
9.2 Million or 9.27 Million or 9.271 Million or 9,271,675?
The answer is… it depends.
The perception is that the more numerals data has, the more accurate. This perception is in GDP, unemployment rates, economic and other data. Yet it’s not strictly true.
Any of the figures could be less or more accurate, but additional digits imply certainty. When collating economic or aggregate data, such as GDP, the chances are in any case the underlying data is an estimate, or a sum of sources based on estimates.
So if a country has a GDP per capita of $33,000 or $31,987 it may in fact be absolutely no different in real terms. Yet it looks and sounds different. This is the problem with a presumption of perfection or accuracy in statistics.
Do a mental experiment, next time you hear a figure, round it up or down.
Chances are 5.1% or 5.7% unemployment may not be accurate, in any case. Australia has 2 million people not ‘employed’ yet has unemployment of around 5% on a population of 22 Million. The quoted figure may be technically accurate, but is it the ‘actual’ real world figure?
To know the accuracy of a data figure, you have to read all the assumptions and notes accompanying the calculation.
It’s worth ignoring all media reports on television or radio on economic data without reading the actual data. Newspaper reports tend to have more time to give background. Although data can be tainted by the source, so you really need to evaluate that.
(I always look for independent non-political data for benchmarking, or at least, a multitude of views.)
Without reading the basis and source… you may as well round the figure mentally before taking it at face value. This trick can get you out of the habit of making differences between small movements in any number.
Connect with me via twitter: @christopherhire
One aspect of buying food these days is reading labels. At least for me. I find I am often checking any processed food before purchasing. Both the ingredient list, and the side nutrition panel.
Doing this for awhile, brings up 2 interesting data points you may not know.
1. The Ingredient list is from largest quantity to smallest quantity. This can be useful for measuring how much fish is in fish, say. Sometimes fish is less than 50% fish. aka not fish.
2. The second is that a decrease in’ real ingredients’ can lead to an increase in calories. An example is ice cream.
Streets (really Unilever) Blue Ribbon Vanilla Icecream is my new purchase. Blue Ribbon Vanilla Icecream has as ingredients 1 and 2: 51% Buttermilk, followed by cream. Which is what ice-cream is really.
This means a lower energy reading of 858 kJ or 205 Calories per 100mL. Or around 500kJ for 2 small scoops.
This compares with readings of 1000kJ or more for other ice creams which have less dairy product (as they substitute sugar). A single Eskimo Pie or Drumstick is equivalent to 3,4 or 5 scoops.
So read your food labels. Check the 100mL/or gram values. And, examine the first few ingredients.
If they don’t read in the ‘correct’ logical order for ‘natural’ food, then perhaps the data is telling you something!
Meetup is an interesting site. It seeks to move an online socializing function to a local ‘offline’ face to face meet-up.
In other words — off Facebook and let’s go get some beers!
What’s more impressive is the way that they brand Meet-up, which is a New York start-up. Here’s an interesting exercise branding Meet-up’s employment culture versus the big comparator of Google and the GooglePlex.
It’s obviously tongue-in-cheek, but it’s a good way to retain and inspire staff. At least I think so.
What could you do to keep your I.T. team happy and proud of your culture?
Connect with me via twitter: @christopherhire
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