Who Needs Data?

When the manufacturers of Tide decided to go greener a few years ago, they did a study of all the different ways that energy is consumed in the making, shipping, distributing, using, and disposing of laundry detergent in the environment.   When Procter and Gamble crunched all the data they accumulated and presented it in a simple bar graph, they were shocked that one bar towered above all the others.  It was the bar for "home consumer use."   It is the last thing anyone expected.  At the time, Tide required piping hot water.  Every good homemaker knew your clothes weren't clean unless you cranked up the temperature of the water.   Fixing that problem turned out to be the easiest, most beneficial, and, in the end, most profitable "fix."   Tide Coldwater was created and an advertising campaign stressed that, with this new product, you could have even cleaner clothes and save on your energy bills.   Win-win for the consumer.  Win-win for the environment.  Win-win for Procter and Gamble.

I heard this story yesterday when I was meeting with Marc Major, a business man in the Research Triangle who owns Cleargreen Advisors ((www.cleargreenadvisors.com), a consulting firm addressing sustainability strategies for large corporations.  After a previous conversation about our proposed new Master's in Knowledge Networks, Marc and I had decided to meet again to discuss possibly placing a collaborative team of MKN students into his company as interns.  

The way the MKN works is that students spend a year honing their technology and social networking skills, taking four required courses, in a project-management and business-oriented Proseminar, and then they spend a year in some kind of actual organization charged with understanding that organization's information needs and working out a solution, integrated into the organization, that they can hand off, with a sustainability and cost-benefit analysis, to be either adapted by the organization and woven into the P and L of the organization or politely declined.   We call it "outsourcing risk" from the organization's point of view---letting these students grapple with some new-style information project that no one in the organization itself can really the time to assess, to understand, to think through, to experiment with, to gather the data on, and then to actually implement on a trial basis.   Students might do this in teams located in a Franklin Humanities Lab for those inclined towards digital humanities, a corporation or small business for the more business-minded, or a NGO or arts or community organization for those with civic goals.  HASTAC itself could even house an interdisciplinary project-team.   The point is deep and critical thinking humanistic and social sciency thinking about larger issues (such as sustainability), coupled with technology know-how, can actually transform real-world problems.  

Marc told me the Procter and Gamble story because I had said one of the four core, required courses for the MKN is "New Modes of Assessment and Data Analysis."   He was pleased.   Sometimes those in the humanities and interpretive social sciences can be dismissive of data, as if it only confirms what we already know.   "The importance of actually analyzing the data," Marc said, "is not to confirm what you know--but to reveal what you don't know."  He continued that common sense often leads us to the wrong answer.  The data is a corrective.   I thought immediately of my friend Dan Ariely's work on behavior economics in books like Predictably Irrational, where he shows that, over and over, we convince ourselves that we know things when what we really know is how we think about them, a tight little circle that confirms our prejudices.

My prejudice is that a lot of humanistic, social science, and scientific thinking is rooted in confirming our prejudices through complex theories that may or may not have grounding beyond our prejudices.   On the humanistic side, we often go with our intuitions rather than our evidence and it feels a little like the parable of the blind men and the elephant.  We grab hold of what we know and thing that is the whole animal.   Something similar can happen in empirical thinking where you measure what is closest at hand and are convinced that proves whatever you extrapolate from that which happens to be nearest to you.   In the Tide story, I can imagine humanistic environmentalists protesting against Tide's manufacturing practices, or even the practices of those making the ingredients going into Tide, which could have required wholesale (and probably, ultimately ineffectual) recreation of production processes and supplier relationships.   I can imagine environmental engineers concentrating on output, how to control the end product.   Both would have been more visible, symbolic solutions, far more disruptive to the business of making laundry detergent, and with far less impact (physical, ecological, and cultural) than making a new product and swaying consumer choice and practice.  The data--if carefully collected and carefully analyzed--can help us make better choices.

But that "if" is the other part of the Master's in Knowledge Networks too.   We believe you must have the data--but you have to think about what counts as data and make sure you are understanding larger causalities, larger systems, larger visions of impact before you decide what does and does not count.  So in Marc's sustainability business, he is concerned not only with the immediate costs and profits of businesses but what the actual environmental costs are to the production and what the hidden costs are to the final profit.  

He and I talked about how, often, companies are internally siloed in a such a way that optimizing the performance of one function or division suboptimizes the performance of the whole system.  For example, an operations manager (who, by definition, owns the P&L for his or her portion of company operations) often views other managers as opponents when suggestions for change arise.  Under most business accounting systems, if I as a manager could make a change that would damage my P&L but would help another manager's P&L, I have no incentive to make that change - and in fact have every incentive to resist that change - even if that change would improve the overall performance of the business.  If, for example, I could spend money to reduce waste in another department, I would be unlikely to do this unless there were some way for everyone to know what I'd done and for me to get tangible credit for my contribution.  This thinking certainly applies to any sustainability manager or team.  Under present accounting structures, many managers view sustainability teams the way they view HR, legal, and other support services -  as expensive add-ons which are perceived to increase company overhead costs (hence the name "cost centers") without improving the bottom line or top line of the P&Ls of the managers who run the "real" business.  

This same self-preservation instinct is the reason that "externalities" (damages created by but not paid for by business) exist in economic systems.  Economic systems are embedded in social systems, which are in turn embedded in environmental systems.  Most mainstream economic theory pays little attention to these linkages, and businesses work to privatize the benefits of their operations while socializing the costs - by dumping pollution into the air, water and soil, by depending on government to fund infrastructure and education and health care and retirement benefits, and so on.

That's why our other core courses are all about ways of thinking through problems in a specific, historically situated, context and culture-driven way and thinking about theoretical problems--concepts--as problems that have to be evaluated from multiple, deep, and incisive points of view.  

"So that's why the social and human sciences are the crux of this new way of thinking about business and project management," Marc summarized.   "The social and human sciences are the connector, they are foundational to a way of thinking critically about everything else, from data to profit and loss to sustainability.   Those fields are the 'knowledge networkers.'"   I'd never heard anyone state it more clearly, concisely, pointedly, and accurately.  That is exactly right.

I walked away from our time on the back porch of Parker and Otis very happy.   Parker and Otis is a successful (and utterly charming) gourmet food, catering, and gift business in the reviving downtown Durham, a business flourishing in a location where others have failed.  The owner had already talked to me about having a team of MKN students working with her to improve a potential online presence.   Now I was talking on her wonderful veranda, among all the other afternoon coffee drinkers with their friends or at their laptops, talking with a local entrepreneur and environmentalist, a former teacher before he returned for his MBA, about not just the nuts and bolts of the program but larger, interconnected issues of why data is crucial to correct our common sense and why training in historically-situated, culture- and context-specific thinking is necessary to really understand data.  The needs of Marc's consulting firm, a small thriving business in a small city trying to make an urban Renaissance, and the manufacturer of Tide all come down to new ways of thinking about problems, ways that are about Knowledge Networks and about thinking fundamentally and deeply about how to view problems beyond the immediacies of what seems like a crisis.  

Thank you, Marc.  You have given all of us over in the proposed Master's in Knowledge Networks some real insights into what we are doing as well as inspiring stories of your own work and your own ways of thinking about what is and isn't sustainable. And thank you for all ClearGreen is doing to help corporations rethink P and L as a sustainable practice.  We can't wait to work with you in the future!