The Bankwatch

The title says it all in this McKinsey piece from earlier in the year.  While it is fashionable, expected and admired to multitask the reality is that it is counterproductive.  The piece expands into a personal strategy to focus, filter and forget.  It’s a welcome reminder for time management principles.  It underlies the thinking with a new aspect to multi-tasking that is addictive and physiological. 

This drug like effect generates company inefficiency, errors and missed opportunities.

Always-on, multitasking work environments are killing productivity, dampening creativity, and making us unhappy | McKinsey

We tend to believe that by doing several things at the same time we can better handle the information rushing toward us and get more done. What’s more, multitasking—interrupting one task with another—can sometimes be fun. Each vibration of our favorite high-tech e-mail device carries the promise of potential rewards. Checking it may provide a welcome distraction from more difficult and challenging tasks. It helps us feel, at least briefly, that we’ve accomplished something—even if only pruning our e-mail in-boxes. Unfortunately, current research indicates the opposite: multitasking unequivocally damages productivity.

An increasingly obvious observation from this Economist piece on the value of social media for commerce.  In particular the original promise was that social media would allow companies to infer and interpret customer preferences in a particularly granular and specific way, by associating customers buying preferences with their friends and their buying behaviors.

Too much buzz – Social media provides huge opportunities, but will bring huge problems | Economist

Most commentary on social media ignores an obvious truth—that the value of things is largely determined by their rarity. The more people tweet, the less attention people will pay to any individual tweet. The more people “friend” even passing acquaintances, the less meaning such connections have. As communication grows ever easier, the important thing is detecting whispers of useful information in a howling hurricane of noise. For speakers, the new world will be expensive. Companies will have to invest in ever more channels to capture the same number of ears. For listeners, it will be baffling. Everyone will need better filters—editors, analysts, middle managers and so on—to help them extract meaning from the blizzard of buzz.

I remain skeptical about how social media might create value for commerce, beyond advertising and awareness.  The original promise (above) has faded.  It has largely been replaced for now by attention to social media for advertising and negative customer opinion awareness.

I would cite two large problems within the data problem that The Economist mentions above:

1. If any commercial value did appear, it would be instantly gamed by advertisers using fake users
2. Beyond the ubiquitous ‘like’ or ‘+1” buttons, people generally focus on the negative rather than promote the positive.  The qualitative product comments are definitely something to be closely monitored.

Don’t get me wrong.  Trends and new stuff will surface in social media.  In fact one study quoted here in Quora suggests that 71% of tweets are original and ignored, with 6% being retweeted.  This suggests that the 71% may well hold some new knowledge and startups are frantically working to assess that data from Twitters feeds.  Mind you, what percentage of those original tweets are ‘what I had for dinner’ or ‘links to web news’.  There is clearly an emerging value around the immediacy of news that is game changing for media.  There is also value in keeping family and friends updated on news.  There might be some user social and personal behaviour inferences that can be inferred.

Time will tell what other value might appear from that data.  But for now, Social Media’s value to commerce is becoming just another media buy to generate awareness and promote purchasing.

There is a brilliant collection of essays in the Jan/Feb issue of Foreign Affairs.  There is one lead piece from Francis Fukuyama entitled the Future of History (premium) which borrows from the title of his earlier book The End of History. 

The broad theme is the failure of politics and the problem with the rise of economics over politics that has led (his words) to the end of left wing idealism as a counterweight to the right. 

Foreign Affairs:  He closes with this statement on what is needed:

It would have to have at least two components, political and economic. Politically, the new ideology would need to reassert the supremacy of democratic politics over economics and legitimate anew government as an expression of the public interest. But the agenda it put forward to protect middle-class life could not simply rely on the existing mechanisms of the welfare state. The ideology would need to somehow redesign the public sector, freeing it from its dependence on existing stakeholders and using new, technology-empowered approaches to delivering services. It would have to argue forthrightly for more redistribution and present a realistic route to ending interest groups’ domination of politics.

He got there by reviewing a host of historic movements and how they arrived. 

• the introduction of the rights of property owners
• the concept that government can only tax when voters agree
• the power to vote for non property owners (an American invention – Andrew Jackson)
• that technology carries some of the blame for driving efficiency that requires fewer workers and provides for greater income generation for well educated, something that supported the growth of middle class.

He moves us quickly through the history of democratic movements which he notes fall out of demographic movements.

• socialism and rise of unions
• communism and its failure
• rise of middle class which through passing of relative wealth to people in large numbers that displaced the earlier two movements
• latterly the flattening of middle class incomes over the past 40 years, and finally
• more recently the rise of a new group of culturally disenfranchised (immigrants, gay, less/uneducated, etc) which has itself displaced the power of the middle class, and further displacing the worker power of unions, by creation of a large third franchise.

Even the Arab Spring he notes can be rooted in a new Arab group that is better off, better educated, that can clearly comprehend the Dictators are firmly between them and a better life.  See this in Russia too now.

But he ends on a note of pessimism that with inequality and friction between these broad groups, each of whose opposing needs broadens, the solutions and endgame are not clear.  In the US, the top 1% of families take home 23.5% of income he notes.

Relevance to Bankwatch:

With this backdrop, we can see clues in the political quagmires we see in the Euro zone and in the US.  The governments are torn about which franchise to follow because it is just not clear.  In fact the structures of governments was designed for a different time and place with much different citizen structure.

We have the additional shift from demographic aging in western countries.

These factors exacerbate the mismatch of the structure of government to the requirements of the population.

This blog is not about politics, but I believe requirements for the design of banks is as dependent on the requirements of the population.  One thing we can see from the last 4 years, is that banks’ design are based on a different set of requirements and not around making them inherently useful and of value to the broad base of people.  Unfortunately, all people cannot successfully claim to be in the top 1% that make 23.5% of income.