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Category Archives: Scale

Innovation and Statistical Significance

During our fourth day of orientation, students at AC4D started learning about the process of extracting insights from data. Inevitably, the topic of statistical significance was discussed. Surely we can’t trust these insights? We only talked to five or six people; these people weren’t randomly selected, and they might represent an anomalous point of view.

If I had a dollar for every time I’ve had this conversation, I would have enough money to change the course of K-12 education to be less focused on analytical thinking. Our efforts to quantify, track, and measure everything have left us in a place where creative insight and provocative thought is almost automatically tempered by a desire for proof. Roger Martin describes that “the enemy of innovation is the phrase ‘prove it’“, and he’s right. During the process of insight extraction and envisioning the future, ideas are fragile, and if you work in a culture driven by data, it’s likely that your idea won’t ever get a chance to grow past their seedling stage.

Simply, statistical significance is irrelevant during research and early stages of innovation brainstorming, because the goal during insight extraction is provocation, not prediction. Designers who are synthesizing research data aren’t trying to make mass generalizations based on what they learned from a few. Instead, they are trying to provoke new realities and look at the world in new ways. It’s a playful process, not a scientific process. And it happens best when it’s separated entirely from a conversation of market forces.

Will this idea scale? Who knows? There’s plenty of time to push ideas through the analytical bean-counting reality of bringing a product to market. During research and synthesis, focus on a local view of product-market fit, one that punts on topics of scale and instead emphasizes emotional value. Give your little happy seedlings of innovation time to grow before you spray Excel scale models all over them. *

* I recognize that the metaphor is terrible. Still, I had a funny mental image of a spreadsheet being sprayed all over my garden, so I went with it. 

Posted in Inference, Scale | Leave a comment

Designing a Course Scheduling System: Take 1

Within this quarter’s Rapid Ideation and Creative Problem Solving class, we were tasked with designing and developing a course registration system. Turns out that our collective memory of archaic, bulky and unfriendly undergraduate class registration processes aren’t a far cry from what exists today.

To attack this problem, we fabricated personas around which we could design. This provides both a set of constraints and assumptions that gives the designer a realistic place to start.

So, my persona. Tony is a second year Information Technology student with a Psychology Minor who live off campus and cares part-time for a sick family member. Because of this, he is limited to afternoon and evening classes and ones that he can get to from the furthest away parking lot (the only one he could afford). He already knows his student ID, login, and has already met with his adviser to talk about this upcoming semester. In front of him, he has a list of classes they discussed during this appointment.

Part of this process was a series of think-aloud user testing which identified (at least) three core problem areas with the first draft. Before we get to them, here are the frames:

Presentation here!

In the next iteration, I have three priorities.

  1. Be more communicative with where the user is within the task. This is based on comments such as “How do I go back?” and “If it’s on the calendar, am I registered?”
  2. Add a ‘map your major’ component where the student can track overall progress within his/her major and minor track.
  3. Get rid of the dropdown menus. Forever and ever.
Posted in Interaction Design, Regulation, Scale | Leave a comment

Scale and Social Entrepreneurship: Is Bigger Better?

Kriss Deiglmeier, Executive Director of Stanford’s Center for Social Innovation, recently wrote a blog post on the nature of scale. She’s pondering the urgency of growth, as described in nearly every entrepreneurship competition, pitch-fest, or best practice. She specifically hones in on the role of locally-specific, effective, but un-scalable solutions. She asks, “It is well known that social issues are interconnected; health, education, environment, and economic development are all intertwined. This is particularly evident across the world in low-income communities. Challenges such as hunger, poor health and poverty impact a child’s ability to learn or engage in education. Thus, there is evidence and research that supports the need for comprehensive solutions –– which are often too complex to be “cookie cutter” scalable. Yet are they not also worthy of funding?”

I wrote a little more about this in Wicked Problems – where my emphasis was on the generalizability of the solution itself. This is a relevant issue when scaling is attempted across cultures, as if proving the efficacy of a solution in Vietnam implies that it will work successfully in Cambodia.

A design solution always begins with a local insight. For many designers, this is taken to an extreme, as it’s an insight about themselves or their personal surrounding. It’s a personal process, one made only slightly more sociable by participatory design or other forms of co-design. Scale is an external force that’s applied or encouraged, often through manufacturing, operationalization, or the amplification effect of digital technology. The externality of scale is artificial: the design solution works and exists independent of the number of people served.

So why an emphasis on serving a large number of people?

For many, it’s a question of ethics, or “goodness”. I once encountered this argument from an extremely wealthy woman, one who gives a great deal of her money to important social causes. She viewed her giving as a selfish act: she was working to improve the quality of the world around her so that she and her children would have a better place to live. As such, she took great pains to research and understand the recipients of any money she provided, and took a self-declared “rational approach to giving” so that her money would “benefit the most people possible.” She thought about it like this: if I’m going to act to help people, I need to be aware of the cost/benefit tradeoff of my actions. Most of us have a practical limit on resources like money; in her case, the scarce resource was her time. And so she based her philanthropic giving on the rationality of maximizing her scarce resource. If it takes 100 hours to evaluate a potential grant recipient, she wanted the most social return on her investment – the most people helped, per hour invested.

The ethical question can be turned around by examining breadth of impact in respect to depth of impact. Pretend we have $100,000 to give to the broad cause of “literacy in the developing world,” and consider this simplistic argument.

Vietnam has approximately 7 million students enrolled in primary and lower secondary schools [pdf link] , and government expenditures per primary school student are an abysmal $23 [pdf link - worth reading in its entirety]. We could take our $100,000 and spend $1 to provide some basic materials to 100,000 students, thus increasing the expenditure per student, for 1.5% of all students, by a small amount. They may purchase books, pencils, or other basic supplies with this money.

Or we can spend $20 to provide more materials, or materials of a higher quality, to 5,000 students, having a more powerful impact but on a limited scale. $20 will appear significant to the students, parents, and teachers, as it represents a doubling of their current resources. This might buy chairs, desks, chalkboards, textbooks, basic electronics, teacher training, benches, more teachers (and therefore more classes – consider that “In Vietnam, more than 90 percent of children in rural areas attend schools with two or more shifts, resulting in an average class time of only 3 hours and 10 minutes per day” [pdf link]).

An ethical argument can be made, successfully, for either of these investments. But I don’t think the ethical conversation happens at the funding level (although I know it happens in excruciating detail at the execution/program level). I think the first investment is broadly assumed to be the best because it touches more lives. It is probably the best in the case of commodity solutions, such as medicine. I don’t think that’s true for most conceptual, qualitative, subjective issues, such as education.

I think scale is also a question of fame and positive press. While the internet has made it possible for massive awareness of an extremely narrowly focused campaign (Kony, for better or worse, provides an example), typical foundation thinking around PR seems to be conservative: a press release describing the massive financial scale of a grant, with the number of people helped as a byline. I’m not smart enough to do the mental arithmetic to figure out what $10B to save more than 8 million children by 2020 means; I also would typically not research child deaths in developing countries to see if 8 million people is a lot or a little (turns out it’s about how many children die each year in the world). Instead, I would marvel at the large numbers, because millions and billions are indeed large numbers, and that would shape my casual view of the effort as extremely positive.

Deiglmeier points out that she hears “… over and over again the frustrations of community driven organizations because funders immediately want to know the ‘scaling’ model of such organizations –– and that funders dismiss them if they cannot provide it.” I hear that, too, and I’ve seen extremely impressive solutions ignored because of their perceived lack of scalability. I would like to see more of a conversation around the need to scale – particularly from the big name funding agencies and foundations – and more questioning of the assumptions around bigger, broader, and more. Design-driven social entrepreneurship can push deep impact, and can provoke meaningful change, without necessarily touching thousands or millions of lives.

Posted in Reflection, Scale, Social Innovation, Theory | Leave a comment

Going Public, and The Pursuit of Quarterly Profits

These are some of the common reasons why a company goes public:

  • To raise capital for new product development, acquisitions, or large expenditures like new buildings
  • To reward employees for their work
  • To provide a way for investors to make their expected returns
  • To compensate founders

But when a company has publically traded stock, there are suddenly new constraints placed on the business. The company now needs to continually earn more money, per quarter, than they earned the previous quarter. That sounds like a good goal – more wealth, more opportunity – but it introduces a completely arbitrary duration for done-ness. 3 months is now the timespan for doing and assessing. If earnings are to be reported each quarter, then activities that promote earnings should fit nicely into 3 month increments. Actions are taken to remedy poor earnings, such as reorgs and layoffs, but these are taken as a response to this 3 month window and not to the response of actual product successes. The potential for long and lasting vision becomes difficult, if not impossible, by the constant need for predictable, financial growth.

Consider HP’s recent announcement to cut 30,000 jobs, and ask yourself – how does a company get in a position where they need to eliminate 30,000 jobs all at once? If this was a change in strategy, it must be a pretty massive change (“Let’s make cars instead of computers”); if it was based on suddenly knowing something they didn’t know before, that speaks pretty poorly for their internal knowledge sharing (“Wow, turns out that our printer division sucks”). It’s not based on any of these things; it’s based on a response to the quarterly outlook of the company.

“Ms. Whitman came to the helm promising to return money to shareholders, and then set H.P. on a course for growth. To date, she has raised H.P.’s stock dividend, and in March announced a corporate reorganization intended to consolidate operational efficiency, for example by merging the PC and printer businesses.” [source] The company has 324,000 people (that’s nearly half the size of Austin), and generated $7 billion dollars in profit in 2011. By any standards that make sense, that’s big enough and lucrative enough. But in the crazy game of publically traded companies, that’s neither big enough nor profitable enough. Because the goal is not profit: it’s more profit than three months ago. Till when? Till forever. And that’s where the whole house of cards comes crashing down. Because there are only a handful of ways to make more profit than before, till forever, in three month increments. In order of increasing ethical questionability, you can:

  • trim inefficiencies
  • keep making new products and services that people find necessary to buy
  • acquire companies
  • license your IP to other people
  • sue other companies
  • fire people
  • lobby the government to create legislation in your favor
  • monetize your product through advertising

I find the push towards advertising a tell, a signal to the world that “we couldn’t figure out how to make any of the other, less obtuse ways of creating value work, so we’ve sold ourselves out to the highest bidder.” I’ll offer you three examples of companies that have arrived at the bottom of the “we’re now public, and so we’re essentially screwed” profit-generation game.

Linked In:

In addition to the advertising that’s all over Linked In, you’ll start to see a more pervasive push for you to sign up for a paid account. For example, you can now only view the full name of first and second connections, unless you upgrade:

Monster:

Nearly half of Monster’s product is devoted to serving up ads, and when you register, you can expect your data to be sold to everyone on the planet.

Yahoo!:

I can’t tell what’s an ad and what isn’t, and that is, of course, the point. Just please, click anywhere and we’ll make a few cents. Anywhere. Please.

*

We’re increasingly seeing calls for companies to reign in the relentless push for quarterly profits. The Henry Jackson Initiative for Inclusive Capitalism (or HJIfIC) has described that “Compensation decisions taken in relation to short-term criteria have not reflected the long-term interests of the companies concerned.” This is true. (The follow-up line is sort of a kick in the teeth, as their conclusion is not that companies should focus on long-term profits because it’s healthier and maintains a greater pride in producing quality products, but instead, “Cases such as these erode popular support for capitalism.”) Al Gore is pushing for a long-view. And Jeff Bezos is commonly referenced as an indicator of the importance of patience in the long view, although I’m not the first to point out that Amazon’s home page looks like someone threw up all over it.

Over the next six months, facebook will start to undergo a subtle change, as benchmarks are set for quarterly profits and revenue targets start to slip. You’ll begin seeing advertising in more prominent places, encroaching on the heart and soul of the product itself. And then, one day, most people will stop using facebook altogether, because another platform will have emerged that hasn’t yet polluted their product with advertising, hasn’t crammed as many sponsored deals into one page, hasn’t started to nickel and dime users through premium features. It isn’t going to be lack of innovation that pushes people to leave facebook. It’s going to be their now and forever pursuit of quarterly profits.

Posted in Reflection, Scale | Leave a comment

A Focus on Scale

Maybe your company shouldn’t scale.

Maybe you shouldn’t focus on making things that are different, new, novel, disruptive, and with broad appeal. Maybe, instead, your company should try to be appropriate, simple, quiet, useful, and focused.

It’s a difference in aspiration. Often, I aspire for both, and when I do, I’m in conflict. I want my school to be wildly successful, and to have a massive impact, and to be well known, and to change the world. And at the same time, I don’t want it to do any of those things: I want it to have a profound impact on the students I teach, and generate enough money for me to live. They don’t seem in conflict, but they are, because a focus on scale changes all of your decisions. A focus on scale needs to be explicit, and it’s a question I think every startup needs to ask and answer not once, but over and over again: Do we need scale to be successful?

For me, this question begs these:

Should we offer online courses?

Should we increase tuition?

Should we sell or license our curriculum?

I know the answers to these questions; these answers are much more obvious and apparent to me. And so when I see news that pinterest is valued at 1.5 billion, forcing the almost automatic introspection of my own values, beliefs, and goals, I let the internal audit happen, and I check my feelings of innovation and disruption to see if they’ve changed. For some, scale is a good goal. For others, it’s a distraction. It’s easy to say “ignore the noise” or “check out of the echo chamber”, but it’s impossible to do. Let the noise help reinforce your values.

Posted in Reflection, Scale | Leave a comment