Analytics, Big Data, Big Data and Analytics, Digital Strategy

Everyday Lessons from the Facebook Data Scandal

24 Jul , 2018  

Everyday Lessons from the Facebook Data Scandal

As the facts come out slowly, there is convincing revelation that what Facebook did and did not do that was highly misguided. There are other realities of the nature of big data capture and digital surveillance in our lives that we must reconsider. Indeed, the notion of privacy and protection are being redefined practically, even if we as a society are not ready for it. Let’s take a closer look at some of the lessons:

  1. Big Data Capture and Digital Surveillance are Constant and Permanent

Our daily lives are driven by near constant surveillance via our smartphones and other digital devices, including our cars, at home devices, watches, and cameras. Uploads to Facebook, LinkedIn, Instagram, searches on Google, trips driven via cars, and an endless feed of texts and pervasive intrusion by apps geo detecting means that our every move is now tracked, saved, and available for future use. This leads to many interesting ideas, like tracking the spread of the flu (as undertaken by Google) and understanding groups, emotions, and helping people with work, life and health. However, all of this is now recorded and can be mined by algorithms in the future, searching for information on people, places, and markets. It means we are now pawns in a digital environment. We create data and consume it. Plain and simple. What is fed to us is driven by the interest of the firms serving the data back. We have learned that those intentions may be nefarious and even malicious at times.

Lesson: Consider your use of the smartphone data. Does the app help you? If not, drop it. What you share and distribute should be considered. Pictures are worth a thousand words and don’t come off the Internet easily.

 

  1. Best Intentions Can Lose Out to Temptations of Profit

Google preaches “do no harm.” The origin of Amazon was to lower prices on books for struggling college students (and others). It all seemed Robin Hood like and well, even Peter Pan like. Carelessly and through the temptation of lower prices, we have all been sucked into telling large tech firms almost everything about what we do. Now, you can invite Amazon to enter your house to deliver goods. Google can control your HVAC via Nest, and Apple (along with others) want to be on if not in our bodies to measure and update our health readings. Indeed, this is all technological progress. However, even the best intended firms have misused data, as seen by Facebook. When will this impact us in other domains? It is not even because the firms have lost or changed their mission statements, but rather seemingly safe and profitable opportunities present themselves (like the one with Cambridge Analytica) and long-term implications are not thought through. Or worse a hacker figures out how to hack into Nest and turn off all the heaters during a freeze, leaving pipes to freeze. Worse things have been done.

Lesson: How much is too much? It is great to get things delivered and great to have the aid of technology at the home. You can’t hack into a deadbolt lock or dangerously take control of a car that is not connected online. Think about the value of adopting the technology and the increased risks of hacking and intrusion.

 

  1. Data Misuse Can Cause Economic Harm to Consumers

In recent years, many property owners have taken legal action against Zillow for its widespread publication of its calculated property values. In a sense, it appears that Zillow has a first amendment right. It does. The challenge from home owners is that such data, especially when wrong or incomplete, can cause economic harm. In the case of real estate, Zillow now commands a mighty seat at the table and its opinion drives buyers and sellers heavily. A friend of mine had a hard time renting an apartment at a fair market rate, because Zillow considered the market rate much lower. Although Zillow was not trying to cause harm, it did complicate the renting. One can easily see how such use of data in healthcare, genetics, and employment history can easily cause great harm. Bad reviews, fake reviews, robot reviews on Google, Yelp and other popular sites have wrecked businesses.

 

Lesson: Confront the misuse of data. Correct mistakes in data. Someday, our courts will have a policy or law to guide them. In the meantime, point out the damages and seek remedy. Often firms when challenged will back off their misuse of the data.

 

  1. Data Monetization Often Exploits Consumers

In my executive programs on data monetization, I often share about how firms can successfully use data to sell products and services. Netflix is a great example. Their use of data has introduced me to many movies that I greatly enjoyed. The trade of my data for recommendations was mostly harmless to me and probably even value creating. However, the optimization performed is something that focuses on the firm’s objective and not mine strictly. Consider a Google ad or an Amazon product recommendation. What is the optimization? To sell what they have in stock? To sell what I most want? I argue that it is to sell what I will most likely buy at that instance! This creates unhealthy consumption and we over-buy! Our emotions, actions, and irrationalities are used against us. It is like placing a plate of donuts at work. Everyone says they don’t want one, but they find a reason to consume and are defeated by the donut. We are moving to this same, very unhealthy focus on consumption of data. We react to that which is in front of us…constantly and with highest priority. In the end, it exploits us, even if we don’t want the donut or the item recommended online. Why did we not just listen to a song, read a book, or spend time with family? Our lives, in a small and growing way, are controlled by the data we are fed.

Lesson: We already consume too much data. Look at the ROI of your time on line. Be careful in what you are seeking. Go shopping on Amazon when you need to buy something. Asks questions versus absorbing messages. Dive deeper into reviews for explanations. Look at the time you spend on your phone. Can you eat dinner without having your phone by you? If not, try it. Invite your family. Ask everyone to tell a story. Imagination is a risk, when we only look at screens. Try it tonight. It might even be fun!

 

  1. Privacy is Undefined

The notion of privacy is one that comes up often when I explore data monetization with companies. In a project involving precision agriculture, I heard hundreds of farmers scream about how the data captured by the sensors on their tractors, combines, and other devices is theirs and not property of the sensor provider and should not be used without their consent and permission. I fully agreed, of course. Consider, however that a drone, plane, or satellite can legally fly over cropland and take photos and measurements of the same fields and do so with no permission of the farmer or economic relationship with him/her. Today, we have many examples of digital surveillance without permission. This is just one. Park at a shopping mall (at least in Illinois) and know your car plates will likely be read by cameras. Walk down the street, and get pop-up ads on your phone from a local business. Such surveillance may be unwelcomed and not because you are protecting Tony Soprano. Perhaps you just don’t want to make it obvious you have left on a long trip or you don’t want someone (and everyone) to know where you kids attend school. Or perhaps you want your family life to remain private. These traditional canons of privacy are undefined in today’s digitally driven world. I suspect we will not get these rights, privileges, or joys back, either.

Lesson: Expect that your life and actions can be published, distributed, and even used in ways that can cause you harm and discomfort. Take control of devices. Fight the fights you can win and demand privacy in your family life and in other areas that matter to you. You can’t make the satellites (or any of the other sensors) go away. But you can turn off the phone, chat bot, and even the Wi-Fi. Try it, watch the family go crazy when the Wi-Fi is out. Ask them what they need so badly. They won’t even be able to tell you. It is a sign that we are not controlling data; it is controlling us.

Professor Walker provides keynote talks, seminars presentations, executive training programs, and executive briefings.

Click here to learn more about his talks, references from clients, options for customized talks and programs, and details on scheduling a program for your organization.

About Russell Walker, Ph.D.

Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. His most recent book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.

 

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By  -      
Russell Walker helps companies develop strategies to manage Risk and harness value through Analytics and Big Data. As Clinical Professor at the Kellogg School of Management of Northwestern University, Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. He founded and teaches the popular Analytical Consulting Lab and Risk Lab, experiential classes, which bring Kellogg MBAs together with real-world projects in Analytics and risk evaluation. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Risk Management, and International Business Strategy. Russell Walker can be reached at: russell-walker@kellogg.northwestern.edu @RussWalker1492 russellwalkerphd.com



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