Technology and Trust

A couple of weeks ago, along with the Intelligent Community Forum (ICF) co-founder, Robert Bell, I had the opportunity to be in a two-day discussion with the leaders of Tallinn, Estonia — via Zoom, of course. As part of ICF’s annual selection process for the most intelligent community of the year, the focus was on how and why they became an intelligent community.

They are doing many interesting things with technology both for e-government as well as more generally for the quality of life of their residents. One of their accomplishments, in particular, has laid the foundation for a few others — the strong digital identities (and associated digital signatures) that the Estonian government provides to their citizens. Among other things, this enables paperless city government transactions and interactions, online elections, COVID contact warnings along with protection/tracking of the use of personal data.

Most of the rest of the world, including the US, does not have strong, government-issued digital identities. The substitutes for that don’t come close — showing a driver’s license at a store in the US or using some third party logon.

Digital identities have also enabled an E-Residency program for non-Estonians, now used by more than 70,000 people around the world.

As they describe it, in this “new digital nation … E-Residency enables digital entrepreneurs to start and manage an EU-based company online … [with] a government-issued digital identity and status that provides access to Estonia’s transparent digital business environment”

This has also encouraged local economic growth because, as they say, “E-Residency allows digital entrepreneurs to manage business from anywhere, entirely online … to choose from a variety of trusted service providers that offer easy solutions for remote business administration.” The Tallinn city leaders also attribute the strength of a local innovation and startup ecosystem to this gathering of talent from around the world.

All this would be a great story, unusual in practice, although not unheard of in discussions among technologists — including this one. As impressive as that is, it was not what stood out most strongly in the discussion which was Tallinn’s unconventional perspective on the important issue of trust.

Trust among people is a well-known foundation for society and government in general. It is also essential for those who wish to lead change, especially the kind of changes that result from the innovations we are creating in this century.

I often hear various solutions to the problem of establishing trust through the use of better technology — in other words, the belief that technology can build trust.

In Tallinn’s successful experience with technology, cause-and-effect go more in the opposite direction. In Tallinn, successful technology is built on trust among people that had existed and is continually maintained regardless of technology.

While well-thought out good technology can also enhance trust to an extent, in Tallinn, trust comes first.

This is an important lesson to keep in mind for technologists who are going about changing the world and for government leaders who look on technology as some kind of magic wand.

More than once in our discussions, Tallinn’s leaders restated an old idea that preceded the birth of computers: few things are harder to earn and easier to lose than trust.

© 2020 Norman Jacknis, All Rights Reserved

When Strategic Thinking Needs A Refresh

This year I created a new, week-long, all-day course at Columbia University on Strategy and Analytics. The course focuses on how to think about strategy both for the organization as a whole as well as the analytics team. It also shows the ways that analytics can help determine the best strategy and assess how well that strategy is succeeding.

In designing the course, it was apparent that much of the established literature in strategy is based on ideas developed decades ago. Michael Porter, for example, is still the source of much thinking and teaching about strategy and competition.

Perhaps a dollop of Christensen’s disruptive innovation might be added into the mix, although that idea is not any longer new. Worse, the concept has become so popularly diluted that too often every change is mistakenly treated as disruptive.

Even the somewhat alternative perspective described in the book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant” is now more than ten years old.

Of the well-established business “gurus”, perhaps only Gary Hamel has adjusted his perspective in this century – see, for example, this presentation.

But the world has changed. Certainly, the growth of huge Internet-based companies has highlighted strategies that do not necessarily come out of the older ideas.

So, who are the new strategists worthy of inclusion in a graduate course in 2018?

The students were exposed to the work of fellow faculty at Columbia University, especially Leonard Sherman’s “If You’re in a Dogfight, Become a Cat! – Strategies for Long-Term Growth” and Rita Gunther McGrath’s “The End Of Competitive Advantage: How To Keep Your Strategy Moving As Fast As Your Business”.

But in this post, the emphasis in on strategic lessons drawn from this century’s business experience with the Internet, including multi-sided platforms and digital content traps. For that there is “Matchmakers – the new economics of multisided platforms” by David S Evans and Richard Schmalensee. And also Bharat Anand’s “The Content Trap: A Strategist’s Guide to Digital Change”.

For Porter and other earlier thinkers, the focus was mostly on the other players that they were competing against (or decided not to compete against). For Anand, the role of the customer and the network of customers becomes more central in determining strategy. For Evans and Schmalensee, getting a network of customers to succeed is not simple and requires a different kind of strategic framework than industrial competition.

Why emphasize these two books? It might seem that these books only focus on digital businesses, not the traditional manufacturers, retailers and service companies that previous strategists worked at.

But many now argue that all businesses are digital, just to varying degrees. For the last few year we’ve seen the repeated headline that “every business is now a digital business” (or some minor variation) from Forbes, Accenture, the Wharton School of the University of Pennsylvania, among others you may not have heard of. And about a year ago, we read that “Ford abruptly replaces CEO to target digital transformation”.

Consider then the case of GE, one of the USA’s great industrial giants, which offers a good illustration of the situation facing many companies. A couple of years ago, it expressed its desire to “Become a Digital Industrial Company”. Last week, Steve Lohr of the New York Times reported that “G.E. Makes a Sharp ‘Pivot’ on Digital” because of its difficulty making the transition to digital and especially making the transition a marketing success.

At least in part, the company’s lack of success could be blamed on its failure to fully embrace the intellectual shift from older strategic frameworks to the more digital 21st century strategy that thinkers like Anand, Evans and Schmalensee describe.

© 2018 Norman Jacknis, All Rights Reserved