Communication – Platform Business Firms

Making Artificial Intelligence (AI) work

This is a follow-up post on my post last week on Moravec’s Paradox in AI. In that post, I enumerated five major challenges for AI and robotics: 1) training machines to interpret languages, 2) perfecting machine to man communication, 3) designing social robots, 4) developing multi-functional robots, and 5) helping robots make judgments. All of this was focused on what the programmers need to do. In this short post, I draw implications on what organisations and leaders need to do to integrate AI (and for that matter, any hype-tech) into their work and lives.

Most of the hype around technologies is built around a series of gulfs, gulfs of motivation, cognition, and communication. They are surely related to each other. Let me explain these in the reverse order.

Three gulfs

The first gulf is the communication gap between developers and managers. Developers know how to talk to machines. They actively codify processes and provide step-by-step instructions to machines to help them perform their tasks. Managers, especially the ones facing consumers, speak stories and anecdotes, whereas developers need precise instructions that could be translated into pseudo-code. For instance, a customer journey to be digitalised need to go through a variety of steps. Let me give you an example of a firm that I worked with. A multi-brand retail outlet wanted to digitalise customer walk-ins and help guide customers to the right floor/ aisle. Sounds simple, right? The brief to the developers was, to build a robot that would “replace the greeter”. The development team went around building a voice activated humanoid robot that would greet a customer as she walked in, asked her a set of standard questions (like ‘what are you looking for today’?) and respond with answers (like, ‘we have a lot of new arrivals in the third floor’). The tests were very good, except that the developers did not understand that only a small proportion of their customers were arriving alone! When customers came as couples, families, or groups, the robot treated them like different customers, and tried responding to each other separately. What made things worse, was that the robot could not distinguish children’s voices from female voices and greeted even young boys as girls/ women. The expensive project remains a toy today in a corner of the reception, only to witness the resurgence of plastic-smiling greeters. The entire problem could have been solved by a set of interactive tablets … Just because the managers asked the developers to “replace the greeter”, they went about creating an over-engineered but inadequate humanoid. The reverse could also happen, where the developers only focus on the minimum features that would make the entire exercise useless. For us to bridge this gulf, we either train the managers to write pseudo-code, or get the developers visualise customer journeys.

The second gulf is that of algorithmic and creative thinking. Business development executives and strategy officers think in terms of stretch goals and focus on what is expected in the near and farther future. On the other hand, developers are forced to work with technologies in the realm of current possibilities. They refer to all these fuzzy language, aspirational goals and corporatese as “gas” (to borrow a phrase from Indian business school students). The entire science and technology education at the primary and secondary school is about learning algorithmic thinking. However, as managers gain experience and learn about the context, they are trained to think beyond algorithms in the name of creativity and innovation. While both creative thinking as well as algorithmic thinking are important, the difference accentuates the communication gap discussed above.

Algorithmic thinking is a way of getting to a solution through the clear definition of the steps needed – nothing happens by magic. Rather than coming up with a single answer to a problem, like 42, pupils develop algorithms. They are instructions or rules that if followed precisely (whether by a person or a computer) leads to answers to both the original and similar problems[1].

Creative thinking means looking at something in a new way. It is the very definition of “thinking outside the box.” Often, creativity in this sense involves what is called lateral thinking, or the ability to perceive patterns that are not obvious. Creative people have the ability to devise new ways to carry out tasks, solve problems, and meet challenges[2].

The third gulf is that of reinforcement. Human resource professionals and machine learning experts use the same word, with exactly similar meaning. Positive reinforcement rewards desired behaviour, whereas negative reinforcement punishes undesirable behaviour. Positive and negative reinforcements are integral part of human learning from childhood; whereas machines have to be especially programmed to do so. Managers are used to employ reinforcements in various forms to get their work done. However, artificially intelligent systems do not respond to such reinforcements (yet). Remember the greeter-robot that we discussed earlier. Imagine what does the robot do when people get surprised and shocked, or even startled as it starts speaking? Can we programme the robot to recognise such reactions and respond appropriately? Most developers would use algorithmic thinking to programme the robot to understand and respond to rational actions from people; not emotions, sarcasms, and figures of speech. Natural language processing (NLP) can take us some distance but to help the machine learn continuously and accumulatively requires a lot of work.

Those who wonder what happened!

There are three kinds of people in the world – those who make things happen, those who watch things happen, and those who wonder what happened! Not sure, if this is a specific quote from a person, but when I was learning change management as an eager management student, I heard my Professor repeat it in every session. Similarly, there are some managers (and their organizations) wonder what happened when their AI projects do not yield required results.

Unless these three gulfs are bridged, organizations cannot reap adequate returns on their AI investments. Organizations need to build appropriate cultures and processes that bridge these gulfs. It is imperative that leaders invest in understanding the potential and limitations of AI, whereas developers should appreciate business realities. Not sure how this would happen, when these gulfs could be bridged, if at all.

Comments and experiences welcome.

Cheers.

[1] https://teachinglondoncomputing.org/resources/developing-computational-thinking/algorithmic-thinking/

[2] https://www.thebalancecareers.com/creative-thinking-definition-with-examples-2063744

Far and near mindsets

Last month, I was at the Yale University and was listening to Prof. Nathan Novemsky on different mindsets. Of the various mindsets we discussed, psychological distance (and its impact on communication and marketing) caught my attention. In this blog post, I elaborate the concept of psychological distance, and why it is important in the context of entrepreneurship and multi-sided platform businesses.

Psychological distance: Basics

Prof. Novemsky’s (and his colleagues’) research indicates that as people get closer to the decision in terms of time, their mindset changes from a “far mindset” to a “near mindset”. When people engage with you on a far mindset, they are concerned about the “why” questions; whereas when they engage with you on a near mindset, they are concerned about the “how” questions.

Let me illustrate. When a customer downloads an Uber App for the first time, she is more concerned about how she is contributing to the environment by being part of the shared economy, and therefore is less concerned about issues like the minute features of the user interface/ user experience. On the other hand, a customer who is getting out of a day-long meeting with a demanding customer is worried more about the minute details of the ride, like the time taken for the car to arrive, type and cleanliness of the car, and driver’s credentials and behavior; as she is engaging on a near mindset.

Communication and marketing

The understanding of what mindset your customer is engaging with you is imperative to designing your communication. When you advertise a grocery home delivery service on television, you might want to appeal to the consumer’s far mindset … that talks about why he should choose your service rather than the neighborhood grocer/ vegetable market. For instance, the benefits of fresh produce straight from the farm (without middlemen) faster would make immense sense. However, when you communicate with your customer after he has decided to place an order, you might want to talk about specific discounts, receiving delivery at a convenient time, quantity changes, add-ons and freebies, and payment options.

What does this mean to start-ups/ entrepreneurs?

That’s simple, right. A founder communicating with a potential investor should talk to the “far mindset” rather than the “near mindset” if he has to raise money. However, a customer presentation has to appeal to the near mindset.

For instance, the home-health care start-up for pets (petzz.org) communicates convenience of all-day home-visits of veterinarians to its pet-owners; the specific plans available that pet-owners can choose from; and the significant increase in business for the veterinarian partners. However, when it runs camps to enroll pet-owners, it talks about “healthy pets are happy pets” communicating to the far-mindset.

However, the investor deck only appeals to the far mindset … how their business model leads to “healthy pets” and why this is a compelling value proposition for its pet-owners, veterinarians as well as other partners in its platform.

[Disclaimer: I advise petzz.org]

Implications for multi-sided platforms

Not so simple. I can envisage that there may different sides of a platform that may be operating at different mindsets and the MSPs may need to be continuously aware of. Take the example of the social-giving/ crowd-funding platform Milaap (milaap.org). The two sides of the platform are givers and fund-raisers.

Imagine a fund-raiser appeal … which one appeals to you most?

“help a school from rural Chattisgarh build toilets for girls”
“help support girls’ education”
“make sure girls like Shanti don’t drop out of school”

As you move down from option 1 to 2 to 3, you are increasingly operating from the far-mindset!

On the other hand, when Milaap attracts fund-raisers with the following messages

“you get the most socially-conscious givers at milaap”
“it’s easy to communicate with givers at milaap”
“it’s is easy to login, set up and free”

As you move down from option 1 to 2 to 3 here, you move towards a near-mindset!

It gets more complicated when the different sides of the platform are at different stages of decision-making. For instance, when a C2C used-goods marketplace platform like Quikr has a lot of buyers and lesser number of sellers; the messaging across the two sides has to be different! For the sellers who are yet contemplating joining the platform, the message has to be appealing to the far mindset (of decluttering their homes), whereas for the umpteen buyers who are looking for goods on the platform, the message has to appeal to the ease of transacting (near mindset).

Match the message to the mindset and the stage of the engagement

In summary, effective platforms have to communicate consistently across multiple sides of the platform, however keeping in mind the different mindsets of the respective sides. A cab hailing app has to communicate differently to its riders as well as drivers, while sustaining the same positioning. If the rider value offering was about speed of the cab reaching you, the driver communication has to be consistent – speed of reaching the rider. For the driver, it is near mindset (speed of reaching the rider is about efficiency), whereas for the rider, speed may be appealing to the far mindset (about not driving your own car and keep it waiting all day at an expensive parking place; or better still, reducing congestion in the city centers). And for sure, these messages also have to change over the various stages of consumer engagement, right!

Any examples of mismatched communication welcome!

Cheers from a rainy day in Nuremberg, Germany.

Building your brand

This is not a post about marketing, though it may sound so. This is a post about how entrepreneurs and leaders communicate. This is relevant for brands and firms as well. Read on.

I listened to a very insightful TEDx talk by Simon Sinek on inspirational leaders. Listen to it here. He talked about how inspirational leaders focus on the inner most ring of what he called the golden circle. In the inner circle is the why, followed by the how, and then the what. He cited examples of ineffective communication, when firms and brands and individuals focused on the what to drive the how and why, and how successful people and brands and firms focused on the why first, before highlighting the how, and what. If you have not listened to it yet, please do so, before you proceed.

As we see a tramline of enterprises biting the dust, liquidating/ selling off to powerful competitors/ selling off at a fraction of its past valuations to firms in complementary businesses, this message is becoming far more relevant. Couldn’t resist this contrast …

Yahoo is a guide focused on informing, connecting, and entertaining our users.

https://about.yahoo.com/

Google’s mission is to organize the world’s information and make it universally accessible and useful.

https://www.google.com/intl/en/about/company/

Just take a look at how these two pages are organised – Yahoo’s page flows like this – a statement of what they do – inform, connect, and entertain; how did they start, how is it to work for Yahoo, and what does it offer for developers, advertisers, partners, and research. Google’s page begins with the company overview (that includes their history), who they are (culture and locations), what they believe, and then what they do.

If your communication focuses on what problems you solve (why you exist), and then lead towards how you solve those problems, and therefore what products and services you offer; I am willing to listen to you. On the other hand, there are entrepreneurs and firms that begin with what they do. For instance, early this week, I heard someone talk about building the Uber of Indian tractors for farmers (if the one who talked about this is reading this, don’t take it personally). I had to probe deeper and deeper to understand what problem was being solved and why did Indian farmers needed a mechanisation solution in the lines of Uber.

Virgin’s Richard Branson also wrote today (11 August) about why successful entrepreneurs should seek problems, and create solutions (read it here). Begin with the problem and the opportunity; the business model and the solution will follow; and thence products and services.

So, whatever brand you are building – of yourself, your firm, your products/ services, please begin with the why, the how, and then get to what. Build a robust brand that stands for something, signifies why it exists, and speaks to the ecosystem on why it exists. Remember the arrow that connects A and z in the Amazon.com logo? Everything from A to Z.

And in today’s world, as firms simultaneously diversify and depend on a cluster of complementors to provide (each others’) customers with unique value, it might not be out of place to conceive of your brand as a platform. A simple platform (like how the automobile companies use the word) upon which your complementors and partners could build on, customise, co-develop, co-innovate, and co-create. Brian Monahan’s post titled “More than a promise: Brands are platforms” (read it here) develops this argument very well. Brian’s primary argument is that brands transcend the promise and should allow for other firms and its partners to shape the consumer experience. Imagine brand Android!

Borrowing the idea from Simon Sinek’s talk, leaders communicate why more than the what. How is your brand communication structured?

Would love to listen/ read/ hear about your brand stories.

Three gulfs

Those who wonder what happened!

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