AI and Tax Season – Why AI and Data Does Not Solve Every Problem & Why Systems and Good Architecture Matter More

A few weeks back, I had the opportunity to visit a tax department for one of the world’s leading global economies. My colleague Alexander Fred-Ojala and I were there to discuss how artificial intelligence and data technologies might fit into their strategic plans.

Data X-Lab director Alexander Fred Ojala explaining how
AI and Data models might work in a government revenue service context

It was a great discussion, and a lot was learned on both sides. We started with two fundamental topics:

  1. Understanding the Silicon Valley perspective on data driven business models and
  2. The tools and techniques used in AI, machine learning, and data borrowed from our very applied Data-X course (see data-x.blog).

This was a great start.

Then we asked them about the opportunities for using these emerging technologies in a tax service.  It was insightful to understand some real life examples that any tax service around the world might be concerned about.  They highlighted one case where a bad actor might login and impersonate a proper tax payer, then file a false return to have the return directed to them. Then later, the innocent tax payer is on the hook to resolve and possibly payback the false return, while the bad actor has taken the funds. It’s basically a fraud scenario. 


Now here is the important insight: What type of problem is
this?

  • an authentication problem
  • a system problem
  • a data science / AI problem
  • a data security problem
  • a website problem
  • an operations problem
  • a policy issue
  • or something else?  

The answer is really all of the above.  It would be a gross overstatement to say that
this problem is solved simply by using data signals to separate authentic users
from bad actors
.

This is really the case with most problems and projects.  While most projects have a problem/solution nature, they rarely look like AI / ML / Data problems at the start.  And when data, AI, and ML are part of the solution, then this technology is certainly not the only or even the main component in the solution.  This is a call for stepping back and looking at problems and solutions at the systems level. 

In real life, the entrepreneurial and innovative process starts with a story or narrative of the problem, and this still holds true in this case — and is in fact very necessary.  In Data-X, we teach students to write a “story” in the first 4 weeks, and then turn it into a low-tech demo without technology.  Then they work on agile sprints for the next 8 weeks. Students (as well as executives) come to us to learn how to use AI, ML, and Data, but they soon realize that the system, solution, and process is much more integrated. If they learn how to first view the real problem, they learn how and where to start, and they learn when and where AI or Data can be part of that solution.

Without learning how to set up the problem in a broad-thinking
manner, the solution will be either too focused on one technology or too
focused one narrow aspect of a problem.  Why
does this matter?  The reason is that without an
integrated approach, the end result will be ineffective, overly complex, and/or
overly expensive to implement.

For years, great technical architects have
understood how to solve complex problems by breaking them down at a fundamental
systems-level while keeping the design as simple and effective as
possible.  Successful entrepreneurs/innovators
have always known how to target  the most
valuable of problems by using story and by using inductive and agile learning
processes. 

System Architecture Development Entrepreneur/Innovator
Start with the user’s story -> Get to Effective Implementation 1.0 Start with user’s story -> get to Business Model
Break it down: first principals/relationships Use story to gather stakeholders/resources
Agile execution Inductive learning
Minimal Viable System: Keep it Simple Minimal Viable Product for market fit
Use broad thinking to reduce failures/flaws[1] Use broad thinking to reduce business risk

This table illustrates the parallel of effective System Development
 vs Entrepreneurship/Innovation Process


You can learn more about our approach for Innovation Engineering by combining the two approaches (of architects and
entrepreneur/innovators). 
We do this
already within Data-X and our industry projects, but it is an approach that is
extensible beyond this domain.

I feel it would be would be valuable if we could further
distill this approach to help companies and organizations around the world to
create innovations that are effective without incurring the massive cost
overruns often associated with new technology projects.  Of course, we would love to hear your
feedback to make it work even better.


[1]
Could be written as increase robustness, increase reliability, reduce cost,
increase performance (all are true while holding other variables constant)

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A Human and AI hybrid approach for complex AI-based Conversational Commerce

Recently, I had the opportunity to visit Manila to tour a new AI and Data firm called AI-Pros.  As you may know, the Philippines has a $27B Business Process Outsourcing industry which includes 900K call center agents. Over the past two decades it has become a major growth driver for the Philippine economy.

On this trip, I was able to see a remarkable real life AI
and Technology powered call center, where the humans oversee and assist a smart
technology that talks to customers directly
.

I literally watched an AI based machine “sell” a vacation package for about $700 to a customer who had no idea that they were talking to a machine (and not a human).  It was literally amazing.  This was not a call to simply “answer a question” or “recommend a product.” No, this was a complete sales process starting with an introduction of a loyalty program, then describing a vacation product, then making the customer feel comfortable, and eventually even taking their credit card information.  And all of this was done in a completely natural tone and manner.

How is this possible?  This firm is using a very different approach to AI and human interaction.  Normally, AI or ML systems use large training sets to learn or infer the decision making patterns of humans and then the machines independently simulate those decisions.  This is effectively supervised machine learning, which is a core building block in AI applications. 

However, the AI-Pros system is different.  It uses a more interactive approach. First, the basic speech patterns are captured from live operators who are very skilled at doing their job, i.e. selling this particular vacation package. Then segments from the conversation can be called on demand and used interactively during new conversations with new customers.  At this point, humans assist the machines to guide the conversation at a meta level, instead of directly speaking into the conversation. 

Even though humans are interactively assisting the conversation, this is a breakthrough approach compared to the way that the giants like Google and Amazon approach the problem. Today, Amazon and Google employ AI chatbots without any human interaction or oversight in the conversation.  Note that the end-goal is the same for both approaches, which is to eventually have the computer talk with a person so naturally that they could even sell you a product or tutor you in a calculus class.  However the machine-human assisted model might actually get there faster.

Sometimes, what seems like the most direct path might seem shorter, but in some cases like this, the more indirect path might lead to the end-goal faster. 

Standard AI/ML Approach: 

    a) Person ← learn from → AI (training)

then
    b) AI ←→ talk with customer (execution)

Alternate: AI/ML/Person Interactive Approach

    a) Person ← learn from → AI (training)

then
    b) Person + AI ←→ talk with customer

In this alternate approach, the AI does not need to be as sophisticated in the beginning and yet the system is good enough to operate in real life execution.  This is really important because the AI can become more sophisticated during the operation over time, on top of what can be learned in the training.  As a result the traditional approach will actually not progress as far nor as fast as this alternative approach over time.

As a parallel, let’s consider Tesla’s approach to autonomous driving vs. driving assistance. While Tesla could have waited until their autonomous driving was perfectly ready, they instead introduced a version where the AI and driver both need to participate. In a similar manner, this has allowed Tesla to introduce the feature much earlier. And the millions of miles of assisted driving that Tesla has driven so far will all be used to later improve the AI’s eventual objective of completely automated driving. 

What we are now seeing in this AI-based selling product is a new approach where the AI systems and humans work interactively.  And amazingly, it already works. As a result, not only are we seeing better results today, but also we are likely to also see much better results once it eventually develops a pure AI-based machine using this approach.

This is an important case and learning lesson for anyone developing AI applications in the real world for very challenging problems.

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Want to work on disruptive technologies? Make your big ideas come to life through Samsung’s UVENTURE Program!

Samsung UVENTURE Office Hours: Learn firsthand about Samsung’s UVENTURE Program or get guidance on drafting your proposal. RSVP for the event on Facebook here. More details below:

Date: Thursday, January 24 th
Time: 2:30 PM – 5:00 PM
Location: Sutardja Center for Entrepreneurship and Technology (2227 Piedmont Ave)

UVENTURE Program

Do you have lots of ideas? Want to work on disruptive technologies? Students, now is the chance to make your big ideas come to life! At Samsung Strategy and Innovation Center, our mission is to discover and develop groundbreaking technologies that will help people all over the world lead happier, healthier, richer lives. Samsung is a world leader in many technology industries, ranging from memory to smartphones to digital health and beyond. We are investing heavily in Silicon Valley and believe that the world’s biggest problems will be solved by people and companies working together. We invite visionary entrepreneurs and innovators to partner with us and give them access to our open ecosystem and unsurpassed resources.

Samsung Strategy & Innovation Center has launched a new UVENTURE competition open to undergrads and grad students at a small, exclusive list of universities. The goal of UVENTURE is to work with the most creative students and drive disruptive innovation through groundbreaking technologies that promise to create growth opportunities or flourish into future businesses.

We invite students (as individuals or small teams) to propose projects in the fields of:

  • Artificial intelligence
  • Robotics
  • Mobility
  • Digital health
  • Natural user interface and AR/VR

The goal is to solve existing problems in a new way or address emerging user needs that current technologies don’t address. Think big!

Winning teams will receive an offer to join Samsung as 2019 summer interns in San Jose and receive a $1,000 cash prize. During the internship you will work on your idea and get support by a mentor as well as Samsung’s R&D resources. Now is your opportunity to make your ideas come to life and build new technology!

For details on how to participate, review the attached program documents closely:

  • UVENTURE terms and conditions along with the release form that you must sign
    and return with your submission
  • Detailed submission guidance and templates to leverage for your proposal

Submissions are due by February 3, 2019. For questions, contact uventure@samsung.com.

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We’re hiring! Looking for students passionate about data and blockchain

Current openings for UC Berkeley students to join the Data-X and Blockchain Lab at the Sutardja Center for Entrepreneurship & Technology (SCET) for AI, Blockchain, and Data projects:
  • 3 technical lead Data / AI positions (paid)
  • 2 technical lead Blockchain positions (paid)
  • 2 self-directed undergrad research students (unpaid)

The Data-X and Blockchain Lab at SCET supports a collection of student and faculty-led projects in AI/Data and Blockchain areas.  Over the past year, the data and blockchain sub-labareas have attracted support for experiential teaching and applied research projects. Current projects from the lab include open source development code for the popular Data-X course and sponsored projects from firms including Amazon, LinkQuest, Neo, Optimus, and Echolink.

More info here: https://scet.berkeley.edu/datalab/ & https://scet.berkeley.edu/blockchain-lab/
The Data-X and Blockchain lab follows the Innovation Collider model of the Sutardja Center, where the work produced is more than research papers, and often includes diverse team formation with people who don’t often meet, such as Venture Capitalists, industry leaders, researchers, and undergraduate students.

The Center and Department are offering 5-7 student openings to join the lab‘s community starting this spring and others to work in the fall and beyond:

Technical Leads (5 openings as technical staff): These openings are for students who already have knowledge of data, AI, and/or blockchain implementation.  These students would be interested in developing new notebooks, lecture content, presenting materials, teaching, and potential travel as experts to global companies and academic locations.  They may also participate in applied research projects for companies such as our newest project in automated mobile “network configuration”, which may also result in a venture opportunity. Having already taken the Data-X or a blockchain course is a plus, but not required. These projects are also designed to lead to significant career opportunities for technical undergraduates and graduate students. This is a paid position.

We will additionally accept applications for 2 non-paid students who would like to contribute to one of our current projects as part of our applied research community.

If interested, please send a statement of interest, 1-2 paragraphs in length, along with your resume to Data-X lab research director Alexander Fred-Ojala, Professor Ikhlaq Sidhu, cc: Melissa Glass (afo@berkeley.edusidhu@berkeley.edum.glass@berkeley.edu). In the subject line and title of your statement, please indicate which position you are applying for.

There will be an info session hosted at the SCET (2227 Piedmont Ave, Berkeley, CA 94720) in the evening of January 25th, if we receive your application before this date we’ll forward an invite to the event.
Thank you and best of luck!

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Using Blockchain for (Social) Good! Four student ventures and use cases

Blockchain is a transformative technology capable of disrupting industries and even altering the social fabric. The recent initial coin offering scandals, plummeting cryptocurrency values, and the general wild west nature of this space have scared off some early adopters and entrepreneurs, and it is a shame. Blockchain has the potential to make a truly positive impact in the consumer and enterprise space.

The students in the Sutardja Center for Entrepreneurship Blockchain Challenge Lab proved that blockchain can be used for good, including social good. Professors Alex Fred-Ojala and Luke Kowalski mentored twelve teams of 4-6 students from incredibly diverse backgrounds, including startup semester foreign exchange students, computer science, economics, and social science majors. Four teams emerged as contenders to be sent to the Collider Cup (where other SCET challenge labs like sports tech, amazoogle, and alt.meat also sent their top talent). We will describe our winning team, RIPchain, and also mention three other, promising blockchain plays in the social impact space.

The three intrinsic qualities of blockchain are transparency, peer-to-peer architecture (allowing disintermediation of brokers adding little value), and immutability (making the source of truth safe from hackers, governments, or agitators). We had introduced these concepts to the students, all in the context of the Berkeley Method of Entrepreneurship. We have added some training in user-centered design and design thinking in order to validate the student concepts and seek iterative feedback from the end users of the apps, services, and services. We discussed blockchain adoption challenges associated with performance and scaling concerns, as well as the lack of standards and regulations gating deployments. All the teams that navigated this complex matrix went on to create actual start-ups in class, complete with user personas, prototypes, go-to-market strategies, and even 4-minute TED-style lighting talk pitches. Here are the top four, starting with our winner:

  1. RIPChain – sent to the Collider Cup!
    The morbid name caught everyone off guard, but here is the central thesis: The truly wealthy can afford an estate attorney to create a will, a trust, and even a health directive. But the average middle-class Jane or Jose cannot afford the $10K fee, if their assets are, for example in the $50K-200K range. Yet, they still want an easy to use, verifiable, and dispute-resistant platform for recording their wishes and for distributing their assets. A blockchain platform can enable a safe, incorruptible, verifiable, and efficient means to record and administer wills. This team had one of the better problem/solution slides and they created a prototype without a computer science student on their team! Did we mention that two of the team members were 16-year-old seniors, and that RIPChain was approached by a couple of venture capitalists and angels who were serving as judges during the Collider Cup? Congrats to Chandler Kowtko (Econ), Cindy Wong (Civil Eng), Daven Subbiah (Neurobiology), and Jagan Subbiah (Neurobiology)!
  2. The second team to use blockchain for social good was BlockAction. They embarked to reform the field of class action lawsuits. They had a great mentor from Skydeck (Brian Bordley) who asked them to ensure that the claimants actually got reasonable settlements, or that the bulk of the gains did not just go to the law firms. The team had addressed the high costs of distribution and slow settlements by deploying smart contracts on the blockchain. They created a white paper, live prototype, and sent us some sample code to review. Vidur Maheshwari (CogSci), Weifan Xu (CivilEng), Christian Murray (Nuclear Eng), Lindsay Saldebar (Business), and Adhiv Dhare (EECS) were the team behind this venture creation. I hope they go through with it, since the pain of responding to class actions is usually not worth the gain. Blockchain could democratize it.
  3. TimeLock was yet another innovative use of the blockchain platform to improve and protect individual IP rights, wrestling control away from a few entities controlling the flow of information. While we do have the patent system to protect our intellectual property, it does appear to be fairly overburdened and inefficient. TimeLock is proposing a verifiable and immutable “digital safe” for posting prior art. This could include research papers, inventions, or even scientific experiments. Their blockchain solution could even enable a peer-to-peer marketplace, where individuals and corporations could license IP and circumvent expensive processes and costly brokers. Arjun Sarup (CS), Justin Wong (CogSci), Nithi Narayanan (CS), Reshma Khanna (CogSci), and Cristiano Lacerda (Startup Semester) were part of this disruption, and I hope they get funded, but after they are done with finals!
  4. And who said that the technology field is dominated my males? Here is an all-female team proposing to utilize blockchain as a firearm registry. They had cleverly constrained their initial solution to responsible smart gun owners. They want to launch on Ethereum, utilizing smart contracts and non-fungible ERC-721 tokens called PISTL. Team members here were Rebecca Bair (Bio), Natalie Enos (Business), Marielle Kinney (Econ), Karina Martinez (CS), Kimia Zargari (CogSci), and Ashton Smith (EnvDes).

These examples illustrate that the concepts and inherent qualities of the blockchain could create positive change in the world. The negative stigma of news stories highlighting initial coin offering scams will hopefully end soon. It will take young and creative minds in multi-disciplinary entrepreneurial courses and ventures to bring about and accelerate this shift, and we will see blockchain transform our lives and make a positive social impact.

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Blockchain: From Utopian to Practical

Safe, Scalable, Cost-effective and Now

Many organizations are testing blockchain solutions today as demonstrations and trials, while relatively few “blockchain compliant” systems are in mass scale production.  The reason for this is understandable.  Some firms hold back because of the mass complexity and development costs of re-writing systems that already work fine.  Others are on the fence because they don’t know the policy implication and even what might not even be legal in the near future.

When we launched our first Blockchain Lab projects four years ago, we took the position that we intended to separate hype from reality.  After looking at many possible applications and the underlying technology, we have found methods to overcome issues in practical and cost effective methods by being smart about how to implement the system.  I’m writing this today, because, I’d like to invite a small number of firms to try this approach with us – we welcome you to contact us if you have been thinking about blockchain but can’t see a clear path to safe, scalable deployment

If you break down (unlink) the blockchain, it turns out that there are a specific set of benefits:

  1. Immutability – being able to write something that will not be erased
  2. Transactions – being able to record a transfer of an asset
  3. Identity – being able to link what is written to a person or machine with a particular key
  4. Resilience via distribution – you can eliminate many nodes or ledger without loss
  5. Smart contracts – tamper proof automated transitions per a policy

What is interesting to note is that every one of these items above can be done without employing a complex blockchain-based system. It is just that the infrastructure to do all of this in one neat, well-defined, scalable, secure, de facto-standard approach has not been developed yet.  One option is to wait a decade until the infrastructure is ready and tested.  In fact, many ventures have proposed solutions to the current trilemma of not being distributed, secure, and scalable.  We don’t have that utopian solution yet, but we likely will eventually have it all in one platform.

However, what we have found in our work at the Berkeley Blockchain Lab is that it is practical and possible to develop systems and applications that have all of these capabilities today by being smarter about the solution design and by using a better mix of pre-existing components.  It is true, we don’t even need to throw out the existing code base that we already have.

If you think about it, we have automated contracts that run every day in code.  If you don’t pay a credit card bill, you get a late fee.  That “is” a smart contract.  It is just not distributed and it is not tamper proof – meaning that someone could change the rules or the amount of the fee and you may not be able to tell.

But suppose it is possible to add resilience, tamper-proofing and blockchain compliance as a feature without significantly changing the existing code base, redesigning and re-testing, and adding additional concerns about policy. Instead, we can add the blockchain as an incremental capability.

We have found that this is possible and practical to change the blockchain implementation complexity by an order of magnitude in the process.  Definitely let us know, if you would like to collaborate on a real-life, practical, scalable, policy-safe, blockchain compliant application that actually makes sense to deploy.

 

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Building foundational blocks with Blockchain at Berkeley

The Sutardja Center for Entrepreneurship & Technology congratulates the Blockchain at Berkeley student-organization for an outstanding year of contributions to the Berkeley blockchain ecosystem — see their State of the Ledger 2018!

UC Berkeley, the Sutardja Center, and SCET students have been involved in blockchain since 2014 when professional students in SCET’s Engineering Leadership Professional Program authored a paper highlighting Bitcoin’s potential impact on banking. Since that time, Blockchain at Berkeley, which sprung out of student activity at SCET and works by affiliated SCET faculty, has been working to further the development of this revolutionary technology at Berkeley.

See more on our Blockchain X-Lab site and at Blockchain at Berkeley.

Blockchain at Berkeley students

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Now Available: Introduction to Mindset and Behavior for Innovation (video)

Which mindsets and behaviors do successful entrepreneurs typically have? How can entrepreneurs learn and practice these mindsets and behaviors to become more innovative?

Presented by Ikhlaq Sidhu, director and chief scientist of the Sutardja Center for Entrepreneurship & Technology (SCET). This 1 hour lecture is a helpful resource for any instructor, student, innovator, or entrepreneur. This video was developed to help students of all types understand the mindsets for innovation and entrepreneurship as well as techniques and simple exercises to expand comfort zones, overcome challenges, and increase innovation behaviors. Now available at no cost on our public X at Berkeley channel.

 

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Blockchain arrives on college campuses

The University of California, Berkeley’s Sutardja Center for Entrepreneurship & Technology (SCET) is one of the first institutions to offer university courses on blockchain technology. Specifically, SCET’s Blockchain Lab facilitates collaboration between new ventures, industry scholars, and academics to evaluate, validate, and execute innovative blockchain projects.

“Academics feel a lot of pressure to maintain their status as ‘world-class experts’ in some narrowly defined field,” said Po Chi Wu, visiting professor at UC Berkeley and instructor of Blockchain Lab. “Just keeping up with the advances in their field is challenging enough and demands all their time and energy.”

Ikhlaq Sidhu, founding director and chief scientist of the Sutardja Center, suggests the hesitation of universities in providing blockchain related courses stems from their uncertainty in differentiating short-lived trends emerging technology trends from long-lasting ones.

“We expect a wave of blockchain solutions that will solve a new set of social issues to disrupt the current world order,” said Sidhu and Alexander Fred-Ojala, research director of Data-X, “Not teaching about blockchain would be equivalent to ignoring internet technology when it emerged 25 years ago.”

For more information on Sidhu and Fred-Ojala’s take on the future of blockchain, click here.

Read the whole story at Wired

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The Applied EQ Project: EQ-Driven Technology Disruption

Written by Ikhlaq Sidhu UC Berkeley and Paris del E’traz, IE Business School.

We have identified two types of mindsets that exist in firms today.  One mindset is the traditional one that believes that success is based mostly on building superior products and services and that customers will automatically follow. The other mindset is based on the realization that today clients are demanding experiences and outcomes more than ever before and that establishing real relationships with customers is today’s secret to success.

As it turns out, many companies are discovering that today the traditional approach of efficient execution and superior products is being increasingly commoditized.  And further, that the competitors of the future will not be the traditional ones.

In reality, a combination of both mindsets is important for success.  These mindsets are not mutually exclusive, and each can be measured in the following manner:

  • Firm IQ: This is the logical component of every organization. This includes all the people and capabilities that create products and new technologies. It’s also the part of the firm’s ethos that drives reliable and efficient execution.
  • Firm EQ: This is the emotionally intelligent ethos of every organization. This EQ includes the people and capability that allows the firm to empathize with its customers by delivering engaging experiences that culminate in real customer relationships.  It is also the social capability of the firm that is required to truly have genuine engagement with its customers, partners, employees and everyone else in the firm’s community.

So how does this relate to a typical firm and its success?  Let’s start with the reality of competition in today’s world.  Firm’s today live in intensely competitive environments and they constantly face downward pressure on prices and financial earnings. Most technology suppliers are commoditized to near zero margins.  And new technologies like Data, AI, and machine learning based applications are starting to disrupt virtually every type of business today from finance to pharmaceuticals, healthcare to telecommunications.  Amazon is now disrupting much more than just retailers. Literally, everyone is trying to figure out how they will compete in a world where whatever they make will probably be offered as a free or ultra-low-cost service by someone else.

And while all of this competition is going on, today’s firms look for relief by counting on differentiation, i.e. better or cheaper products, often supported by using the latest in new technologies.  All of this sounds completely logical, particularly since it is usually driven by the high IQ part of the company’s mindset.  The only problem is that what has worked in the past will not work in the future.

Firms that create differentiation today don’t do it with only with execution speed or technology advancement.  The bigger factor of product and service innovation today is customer engagement and their ability to build genuine customer relationships.  And to accomplish this, firms require more than IQ, they need an enterprise-wide EQ, or a seamless obsession with the customer’s experience across the entire organization, whether that experience is through people or aided by technology. It is what we call “Applied EQ.”

Name any of the more innovative, glamourized firms today (e.g. Amazon, Apple, Tesla, Netflix, etc.).  Yes, they can execute.  But what do they execute is the question?  They execute in a manner to develop scalable and genuine customer engagement and relationships.  For example, many firms sell phones and music listening devices, but Apple’s offerings emotionally connect, which means that people will stand in line all night to buy their next product — even if they don’t know why they need it.  They have a relationship with Apple products. Netflix is the firm famous for creating 20 million customer relationships, but without relying on a customer support center.  They did it with an algorithm and an engaging computer interface. Through this algorithm and the data they collect, Netflix knows better what you want, and they even know it before you know you want it (in many ways like Amazon).  It’s very hard for other firms to compete with that.  In the older Blockbuster Video model of the world, they tried to have customer relationship using live “people to people” conversations.  The result was, of course, ineffective, and eventually Blockbuster became irrelevant.

In fact, we have now come to the point in our technology capability where machines and computer interfaces can detect and amplify emotional engagement.  Your computer will soon know when you are losing interest in any topic and will be able to say to you, “why don’t we do this later when you are not distracted.”

Figure 1: Many firms could thrive if they execute well,
but EQ is the missing ingredient.

So, just like with people, success is a function of both the IQ and the EQ.  And while execution and technology are necessary (IQ types of factors), success is at least equally and sometimes more related to emotional intelligence and effective relationship (EQ types of factors).  This is true for firms, just as it is true for individuals.  And take note, even the firm’s technology should support the emotional intelligent and empathetic needs of the firm and its customers.  In fact, great technology-focused people can now truly add value to a firm in a way that could never be done before. The customer engagement and experience is now just as much a technical issue as it is a human-centric issue because of advances in software, AI, ML, and data.

This is where the Applied EQ comes in.  So many firms already have execution skills and often they have a great advantage in the business logic and/or technical capability, but they still struggle.  What they are missing is the EQ to maintain customer loyalty, understand the true needs, and set technology strategy that leads to meaning and purpose for the firm and its customers.

This is where so many CTO, CEO, and even McKinsey have gotten it wrong!  The recommended actions for a firm’s strategy generally come in 2 unhelpful categories:

  1. Completely Naive: Let’s catch up, become more innovative, and use/acquire advanced technologies like Data, AI, Blockchain, Machine Learning, etc.
  2. Logical, but ineffective: Let’s look at our business purpose first. What is the business strategy?  Then let’s see if and how technology can make it work better.

The second option does seem reasonable, but it is still missing the key elements of EQ which is the heart of the customer relationship.  With Applied EQ, we are in a global dialog with firm leaders to insert the missing ingredient back into the planning and learning process.  The path that we have seen to be most effective is the following:

The EQ Forward Path:

  1. The Reality Check: How would you make money if the cost of your current product or service was no cost or low cost?  Who do you think you are competing with?  Where could disruptions in your industry come from?
  2. The Response: What strategy will allow you to adapt to reality while considering the customer pain points?
  3. Your EQ Strategy: Do you know how best to engage with these target clients? Can you build genuine relationships? How? What emotional connection can our customers have with our products, services, and firms? What emotional need or larger purpose is related to our product, service, and customer relationships?
  4. Align the technology: Do you know how to leverage today’s emerging technologies to develop these engaging experiences and strategies? What role is Data playing in your firm? Do you know who else is collecting data on your customers? What is the innovation or technology can we invest in to scale our ability to emotionally connect
  5. Align the Human Capital: Who on your team has the best empathy for the customers. What is the best path forward from a low or moderate social/emotional engagement to a relationship that has a high level of social/emotional engagement?

Does your staff have the necessary level of EQ to take your firm to this next level with your customers? Today’s innovators at every level of the firm need a mindset which is obsessed with the needs of the customer and is truly empathetic with respect to engagement.

No longer is client satisfaction enough to scale your business, clients today are seeking out those companies that are obsessed with delivering client experiences that are seamless and engaging. You need to be obsessed with your client needs.

Our work in Big Data and Machine Learning has taken a new meaning, as what was once a “nice to have” is becoming a critical factor of what separates successful future firms from those that will be left behind. Even Startups and SMEs today need a Data Strategy that delivers on customer experiences.

The promise of Data has arrived. Is your firm ready for it?

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