“Data is the new oil” the much touted and oft repeated phrase highlights the increasing importance of data in a changing world powered by technology. However, with the recent turn of events after the Facebook Data scandal involving Cambridge Analytica and its alleged misuse to manipulate voters, saying ‘Data is the new turmoil’ will not be an understatement.
However, data alone is not to be blamed, it is the way it has been handled and the way organizations responded to the data they had led to this situation. Data is like any other tool in the hands of mankind which can be used both for completely benign and harmful purposes, depending on the user’s discretion. In this article, I will focus more on the behavioral and structural aspects
Erosion of trust:
Trust is the factor which oils this large machinery we call society. We keep our money in banks, because of the trust we have in the banking system. That is why any aberration in the banking system makes for a big news. We vote for a particular political party, because at that point of time we bestow certain amount of trust in its members for fulfilling their electoral promises. Trust is perhaps the biggest intangible asset a brand can have: whether it is a corporation, a political party, a Government or an individual.
Am I perturbed by the data leak because my shopping patterns, or likes or political orientations are so precious to me that I do not want them be seen by any one? Am I so naïve that my opinion can be manipulated by fake news and targeted ads? The answers to these questions can be subjective, but one thing which disturbs many users of Facebook is that the trust we bestowed upon it stands betrayed. Trust conditions the human mind to assume that everything in the background is working fine. Once broken, it allows the fear of unknown to creep in. So questions like “is the Cambridge Analytica fiasco an isolated case? To what extent my data is being captured? Who else has access to my data? Are my private conversations also susceptible?” naturally arise in one’s mind
Erosion of trust, an intangible asset, poses immense risk to tangible assets and in some cases even to the existence of the institution. In days following the Volkswagen Emission Scandal coming to fore, its stock price tumbled more than 35%, several law suits were filed against VW, Switzerland even went to the extent of banning sales of VW cars. Around $50 billion has been wiped off Facebook’s market value after the data scandal, and the personal brand of its founder Mark Zuckerberg has taken a beating as he braces himself to testify before the US Congress.
Too big to manage?
For a startup founder, in the initial days, it is natural that Corporate Governance is not the top of the mind item as he/she grapples with funding, hiring, business development, customer retention and so many other things. For a founder, corporate governance and culture are an extension of his/her own beliefs and ethics which are easy to implement when the organization is small. Decision making is also fast and fluid and in many cases does not require a set of processes and defined structure. However, when the organization grows, the professional ethics and beliefs of too many players get intertwined with yours in determining how the organization operates and how it is perceived by the external environment. For example, in the Facebook data scandal, the data, collected by a researcher, was transferred to a third party which allegedly further used the data for political manipulation and targeted political ads.
As an organization grows, it needs to start setting up processes and structures in place. In its initial phase, it is difficult for a startup to say no to a business, as the organization grows, it should be increasingly made capable of taking the tough choices, which might even include turning down a business opportunity, under a broad framework of Good Corporate Governance and Responsible Corporate Citizenship.
We increasingly see cases of a bright startup or its founder running into rough weather for reasons which have nothing to do with product failure. Then there are startups which run into rough weather while scaling up.
When should a startup start framing rules and processes? When should it decide what its organizational culture should be? There are no clear answers. The line between a start up and an established corporate entity is blurred. What is not blurred is that any entity which wants to be there for the long haul should have a carefully built and nurtured organizational culture and robust processes and defined structure.
Who owns the data?
Data is an asset and it is natural for any asset to have ownership. If I provide my consent to a tech company to access and store my data, who is the owner of that data? Is it me the principal source of data, or the platform which tracked and collated the data?
Someone who is not an owner of an asset does not have any right to sell it unless the owner of that asset legally grants that right to him/her. If I agree to provide access to my data to say, a Facebook, should it retain the right to share it with a third party? Do I, the principal generator of data, have the right to know for what purpose my data is being used?
The solution lies in clearly defining the ownership of data and respecting the ownership by asking for consent again, again and again. As Steve Jobs famously said:
“Privacy means people know what they’re signing up for, in plain English, and repeatedly. I’m an optimist; I believe people are smart, and some people want to share more data than other people do. Ask them. Ask them every time. Make them tell you to stop asking them if they get tired of your asking them. Let them know precisely what you’re going to do with their data”
A churn, many times leads to an overall good. On a positive note let us hope that the current turmoil should ideally lead to more awareness on data privacy and better code of ethics on handling data.
(The author is an alumnus of IIM Calcutta, with interests in policy, innovation and entrepreneurship)