Why we should all embrace fintech

By Neil Patrick

If you ever read this blog, you’ll know that I am frequently pessimistic about the free for all which typifies business in the digital world. That’s because for every great leap forward, a new set of problems are created. And these problems are solved far too slowly or not at all by the institutions which are charged with the protection of citizens.

Social media has become a mind-numbing addiction for millions. Online bullying and hate makes life miserable for young people, minorities and even politicians.

Cybercriminals are targeting the vulnerable and law enforcement agencies are struggling to adapt to the new forms of crime which infest the internet.

Surveillance capitalism has spawned new business models which intrude into the very fabric of our private lives, directly turning our most personal desires and fears into profit opportunities.

Online gambling apps have put a betting shop into everyone's pocket with predictable consequences.

The disruption (actually destruction) of long-established businesses is displacing millions of people from their jobs, whilst simultaneously creating comparatively few specialised jobs for a new digital elite.

But there’s one technological revolution happening which excites and inspires me more than any other. It’s called fintech. This is shorthand for ‘financial technology’.

Sounds boring right? It’s anything but. It’s potentially the greatest force for good to emerge yet from the digital revolution. And it's growing fast:

Fintech is directly challenging the global dominance and exploitative practices of some of the world’s biggest and most disliked and distrusted businesses. The banks and big financial firms.

Granted, fintech didn’t have a promising start. One of the earliest financial sectors to leverage the online world was payday loans. An exploitative and immoral financial business which brought misery to millions. So I felt genuine joy when Wonga, the biggest of these firms in the UK, was finally put out of business last year. (My post about this is here).

But Wonga wasn’t really a true fintech business. It was a just an early mover online. Before Wonga, payday loans had been available offline for decades. Wonga was merely the first payday lender to use the internet to upscale fast.

True fintech businesses are a different matter. They are redesigning the financial world with a customer focus, more than a profit one. They are throwing away financial models which for decades have ensured that innovation and customer focus have been more or less absent. Models which through their universality, combined with customer inertia, have meant that just like casino owners, big financial firms could get and stay rich by doing not much at all apart from pretty much the same thing week in week out.

Fintech founders come from a different place completely. They start with a problem and seek to deliver a solution. And that problem is usually a consumer problem. Want to reduce your energy bills? There’s an app for that. Want to get the best return on your savings? There’s an app for that too. Want to avoid overdraft charges? …you get the drift.

But these are just the least innovative fintechs. The most ambitious are seeking to redesign the whole way in which people manage their money and delivering the tools to help them do it. They are rethinking and reshaping the relationships people have with the world of finance. They are taking away the complexity, tedium and difficulties that prevent most people make the most of their money.

Basically, everyone needs the same thing with their money. We want it to be secure. We want to save some, spend some, invest some, borrow some. This is where the problem starts because most people lack the time and specialist knowledge to do this effectively. And very few people want to spend their time learning how to manage the complexity that is involved. This has been true since the banking industry came into existence. So a whole global tribe of advisors and intermediaries sprang up to service this need. Some were good. Some were criminal. Most were pretty mediocre. All charged a lot for doing not much at all really.

To compete with the sleeping incumbents and financial giants, fintechs must do things better, faster and cheaper. And because fintech founders often have backgrounds in things other than banking, they bring a fresh and creative mindset to the questions of how to make money work better for people.

Regulators recognise this revolution is their opportunity to reshape the way banking and finance works. It delivers the sort of more open, transparent and competitive markets that they have been trying to create for decades, mainly through the imposition of regulations and punishment for their breach. The money police made plenty of arrests for sure, but they rarely accomplished much else.

And critically because fintechs are bound by exactly the same stringent regulations and controls that govern the whole financial sector, there’s almost no scope for fintechs to duck and cheat as we’ve seen in other fast growth online business sectors.

The final proof that fintechs are destined to become embedded in all our financial futures is that the biggest investors in the new kids on the block are the old school institutions. It’s not quite turkeys voting for Christmas, it’s more like passengers on the Titanic leaping for the lifeboats.

But fintechs are struggling to get through the mass of regulatory red tape. Instead of the digital free for all which has allowed the unscruplulous to take advantage, in fintech we have the opposite problem of stringent regulations killing many promising and transformational businesses before they even begin.

Regulators have one last chance to prove that they can police this without killing it. They want more transparency, more competition and fewer obstacles to consumer choice. Fintech can deliver all these things and more. But as usual, the fraudsters are lurking in the mass of legitimate innovators. The regulators need to skill up fast or watch their wishes for financial market transformation evaporate.

And since regulatory failures were at the very least an accessory to the 2008 financial meltdown, here's the chance for regulators to win back a good deal of the trust that was lost.

The great power of technology demands great responsibility

By Neil Patrick

Technology is not a panacea; who uses it for what end is what matters.

Two stories generated headlines in the UK media this week. Both involved the careers of British men who pursued entirely different paths to reaching their more or less simultaneous denouement.

One was a media celebrity and recognisable face to millions. The other virtually unknown and unlikely to recognised by anyone outside his immediate circle. The former was vilified; the latter applauded.

Jeremy Kyle at Radio Festival 2010
Photo Credit: James Cridland

The first is Jeremy Kyle. A sort of UK version of Jerry Springer. I say ‘sort of’ because while both used a similar show format, in comparison to Springer, Kyle comes off poorly.

"Jerry Springer was confrontational but had a charm to him that diffused some criticism," said TV commentator Cameron Yarde Jnr. "He was witty but never came across as sneering."

Kyle’s show was axed this week after it emerged that a show guest, Steve Dymond had committed suicide following his appearance when he failed a lie detector test. Today it’s being reported that two more deaths are being linked to his show.

Lie detector technology is old and crude. It’s cod-science. It can be gamed and even experts confess it's little more reliable than guessing. But its aura of science leads the public to believe it's infallible, when in fact it depends entirely on who is using it and for what purpose. When that purpose is sensationalism, it’s the devil’s own device.

Kyle’s show ran for fourteen years on ITV where he was both ringmaster and provocateur in a show which a judge once described as ‘human bear-baiting.’ District Judge Alan Berg made this comment in 2007 while sentencing one of the show's guests, who’d head-butted his love rival during filming.

Judges are not prone to exaggeration. Kyle’s show involved ‘guests’ who he’d bring on to his show to disclose their deepest and most troubling personal problems. The proposition to them was that Kyle would in some way ease their suffering and help resolve their problems.

Any normal person would be deeply dubious that appearing on national TV in front of a studio audience who regard you as scum could under any circumstances be genuinely helpful.

But these people are not normal. They exist in an impoverished parallel universe. They are educationally, economically and socially the least well-functioning members of society.

Guests would be chosen and then persuaded to appear on the basis of the shock value of their predicaments. Domestic abuse, gambling, drug and alcohol addiction, paternity, infidelity, incest, rape; all were grist to Kyle’s mill. The more sordid the better.

On The Jeremy Kyle Show, the host was "as confrontational as the audience". Kyle would adopt a scarcely merited position of moral superiority, switching between compassion and hostility as a pseudo-counsellor.

His program was carefully calculated to extract the ugliest and most shocking details of the lives of Britain’s underclass. And worse, to manipulate and goad them towards the inevitably violent outbursts which had to be restrained by the burly security types hovering sidestage.

The show used every lever available to find and persuade those in torment to air their darkest secrets and grievances to the nation. This would be traumatic enough in private counselling, but Kyle used a contrived environment calculated to extract maximum sensationalism for his sneering and jeering audience.

These lives are tragic enough without being used to generate ad revenue through the million or so daily viewers the show averaged. But there’s a market value to one million bored people with nothing better to do than delight in the life traumas of others. If any reality TV show revealed the ugly face of naked media capitalism, this was it.

If this proves to be Kyle’s career terminus then I’d suggest it could have been foreseen. We can tell a lot about a person from their CV.

Born in 1965, from 1986 to 1995, Kyle worked as a life insurance salesman, recruitment consultant, and radio advertising salesman before beginning his broadcasting career as a radio presenter in 1996.

These first nine years of his career were working in jobs which the goal was the achievement of sales targets. People are merely pawns to enable the sale. And they are controlled and manipulated with one goal only – making money from them.

Kyle’s show took this ideology (if it deserves such a title) to the big stage of national TV. And for years, no-one at ITV was in the slightest bit troubled by the dubious morality of the venture. Big ad revenues are a powerful way to diminish moral scruples after all.

I’m glad to see this monstrosity of television terminated, but beyond sad that it required someone’s death to bring it about.

But to end on a happier note, we should look at the other career story.

Julian Richer founded a business selling hi-fi in the 1970s. Today Richer Sounds has branches nationwide and around 500 employees.

Richer Sounds branch London Bridge
Photo credit: Richer Sounds

This week Richer, now aged 60, announced he would commence the transfer of ownership of his business to his employees. He put 60% of his shares in trust for this, as well as making a bonus payment of £1,000 for every year of work to each employee. The average staff bonus would be £8,000, but since many staff have worked there for 30 or more years, some will receive much more.

Julian Richer is the sort of entrepreneur and capitalist we need a lot more of today. And as a long-standing if infrequent customer of his shops, I have nothing but praise for the customer experience he and his people provide. If I have a retail hero, Julian Richer is it.

The way he treats his staff shows in surveys which report that 95% of them love working for him. His approach translates into tangible results: In 2012, his 53 stores produced profits of £6.9m from sales of £144.3m. No mean feat in an economy full of high street retail failure and depressed consumer spending.

Over four decades he has championed providing secure, well-paid jobs because he believes a happy workforce is key to business success. At a time when zero-hours contracts are blighting the labour market, he has been rewarded with loyalty from staff who worship him.

Just like Kyle, Richer’s career is a product of who he is and what he believes in.

When he was 14, during the energy crisis, he bought a case of candles for £3 and sold it for £15. That was followed by second-hand hi-fi equipment – he would do up turntables and sell them. By the time he was 17, he had three people working for him.

At 19, he opened his first Richer Sounds shop at London Bridge. He is devoted to what he calls "the biz". His parents worked for Marks & Spencer – a firm which famously also treated its staff well.

Richer has many parallel and philanthropic interests. He was the first patron of The Big Issue Foundation and an early director of the Prince of Wales's Duchy Originals. He's the founder of Acts 435, a charity launched by Archbishop John Sentamu to help those in need, and ASB Help, a charity to help the victims of antisocial behaviour.

"The biz" is his life's work and he sees it as only natural that those who have contributed to his company's success, the staff, should inherit it.

I don't think we should make the contrast between Jeremy Kyle and Julian Richer a binary one. Kyle is not an inherently bad person. He just made some bad judgements and probably lost sight that the net benevolence of his work was at best neutral and at worst negative. He possibly genuinely believed that he was doing good work, and chose not to reflect too hard on the basic morality of his business model.

Technology is inherently neither good nor bad. It's morally neutral, therefore, it demands that we provide the moral compass for it. Sound human judgement is needed to provide this.

Creators and users and their motives are what really matter. Perhaps we should care a little less about technological progress and a lot more about moral progress.

Fast fashion – British men to lead solution to a global problem

"This is nice - it will look perfect in landfill"

1 April 2019

By Neil Patrick


Clarkson, Clegg and Facebook unite to clean up... 

Fast fashion is a big problem. According to the latest news, on average, people wear clothes just two and a half times before throwing them out. I am still trying to figure out how you can wear something half a time, but I’ll let you know after I’ve carried out some experiments.

Anyway I must be a statistical outlier - if I throw something out, it is likely only because I have spilled creosote all over it and the stains look like something unspeakably horrible has happened to me.

Fashion has been getting faster and faster for years. The fashion industry has created ever shorter cycles - winter and summer seasons have been replaced with lines which change every week or so. The original fashion put-down of ‘that’s so last year’ has become ‘that’s so last week’.

This is all made possible through the outsourcing of manufacture to factories in the third world with low pay, child labour and terrible working conditions. And the insatiable fashion addiction of millions. Fast fashion is to the planet what fast food is to health.

The environmental impact of making just one T-shirt is frightening. It uses enough water for one person to drink for two and a half years. Manmade fabrics take 200 years to degrade in landfill.

The principal consumer culprits of this combined speeding offence and environmental catastrophe are young and female – or at least those whose wardrobes are overflowing with cheap clothes from the likes of H&M, Zara and New Look. I know this to be true because I have a daughter and apparently, it’s important to buy a new outfit for every climate change demonstration she attends.

So I was pleased this week to hear about a new initiative to tackle the problem once and for all. A combination of celebrity influencer power and technology have come to the rescue.

If fashion is just too fast, it needs to be slowed down. For possibly the last time in history, this job needs a man. Ideally an old and fashion-proof one.

Step forward the man whose expertise on fashion and speed needs no introduction; Jeremy Clarkson. Apart from driving cars fast, nearly always without crashing them and only ever slightly injuring a few people with his bare hands, his fashion credentials are impeccable.

After eco-crime accessories Trinny and Susannah praised Clarkson's style as resembling that of a market trader i.e. an authentic provincial homme du jour, he was persuaded to appear on their fashion makeover show What Not to Wear. Here he was awarded their all-time worst dressed person award. He responded to their attempts at restyling him with due distain. Clarkson said he would rather eat his own hair than appear on the show again.

This week, as well as fumbling about a bit with Brexit, the government announced Clarkson’s appointment as Britain’s first Fast Fashion Tsar. He’s tasked with creating and implementing a road map to put a stop to the environmental destruction wrought by fast fashion.

 Fast Fashion Tsar Clarkson arriving (late) for work yesterday 

Clarkson has already proven his green credentials on Top Gear and more recently The Grand Tour, where fuel economy is one of his top concerns:

"There's a gallon of fuel gone there, and another there...and yet another there. As a matter of fact, the only way this car could be less annoying to eco-mentalists is if its engine ran on sliced dolphin."

So his qualifications are pretty unquestionable. If young women addicted to fast fashion are the problem, the choice of antidote of an old man who wants everyone else to be slower and less stylish than him is inspired.

But one man, even one as accomplished and admired as Clarkson, cannot solve the problem alone. He needs technology. And this is where Facebook is stepping up to the challenge. Nick Clegg, former virtual deputy assistant prime minister and keen eco-mentalist himself, has spoken for the first time since his appointment in October 2018 as Vice-President, Global Affairs and Communications at Facebook. He’s announced that Facebook will launch a new app which monitors and reports the fashion speed of users. He said,

"Our new app FashBit, is definitely a good idea. I think. Yes it is a good idea um for sure. It gives users complete control over their fashion speed. So it’s like you know helping people which is a good thing.

Mark says it has digital stuff in it which is completely secure and which we only share with consent. Like location tracking that monitors the amount of time spent in fashion stores, and status updates to tell you if your fashion is getting dangerously fast. And it's free so everyone can use it. It’s a no brainer really."

Facebook Chief of Data Acquisition and Repurposing, Brent Beard said,

"We've gone granular on this. We're mega-passionate about the planet and all the things on it we can help leverage. FashBit is our ideation of high fiving the unicorns.

Our online fashion integration technology unpacks the number and fabric composition of clothing purchases. It gives fashion brands drill-downs to know who is shortfalling on clothing purchases, so they can buy more energy efficient and laser-targeted advertising to them. In the meanwhilst, Facebook users who are maxing out in the apparel vertical will have fashion ads replaced with environmental ads - pictures of cute animals and cool nature stuff encouraging them to buy smaller shoe sizes which enables smaller carbon footprints."

Asked about his new challenge, Clarkson was clearly ready to take up the gauntlet. He said,

"My message is simple – everyone who is not me should stop prattling on about it, roll their sleeves up and get busy saving the planet. I’ve been doing my bit for years.

I’ve been wearing these same jeans for over twenty years without a single malfunction and the boffins tell me that’s saved over 40 endangered species. Turtles are dying right now just so you can buy another bloody frock which doesn’t suit you anyway. Think about that while you’re browsing the interweb for your next outfit which will be in landfill faster than a Frenchman can drop his pants."

Fashion retailers and brands are yet to show unqualified support for this innovative approach, however. They believe self-regulation is adequate and have taken direct action by printing millions of T-Shirts with pictures of polar bears and slogans to help get the message across. Spokeshuman for the Clothing Retail Association of Producers (CRAP), Krystal Methany said:

"So, our members strive like endlessly to reduce their like footprint stuff yeah? They’re like so awesome you know and are like totally committed to sustainable, kind of inclusive business models? We print T-shirts with pictures of like elephants? And slogans which really make you stop and like um think? They've created like literally millions of jobs for poor and starving people who would otherwise have to eat uncool stuff like you know, soil? Yay! I should try that diet – no, no I’m only joking dot com. We hashtag adore them all."

Asked about the choice of Mr. Clarkson to lead this initiative, Ms. Methany said:

"Jeremy Clarkson said the exact car I have which is like a Mercedes sports car was ‘a pretty car for ugly people.’ That’s like literally a hate crime? So he’s you know like totally unadorable to me? He’s a gross old man who doesn’t get it that the fascist um fashion industry makes the world a more beautiful and peaceful place for sort of like everyone I know? You know?"

Marketing to older demographics is a disgrace to the profession

If you think this is how to appeal to mature consumers, you need to grow up.
 A lot.

By Neil Patrick


Many marketers view older demographics with scarcely disguised distain and patronise them with naive assumptions about who they are and how they live their lives.  The over 40's are a high value and discriminating (in a positive sense) target market, yet brands and marketers regularly fumble their marketing to them. Why?

At the time of the 2011 Census, the median age for the population of England and Wales was 39 years. 27% was aged 40 to 59 years, and 22% was aged 60 years and over. In other words, almost half (49%) of the UK population is aged 40 or over.

Not only that, all the data tells us that people aged 40 plus have greater wealth and disposable income than younger people. The over forties are the most valuable age demographic in the UK today.

No business with any sense would want to alienate its highest potential market segment. So how can such an illogical situation be explained?

I think the explanation is actually very simple. It’s because people in marketing and advertising are generally under 40 themselves. They see the world through a lens which reflects their own likes and dislikes. They simply cannot empathise with those who are older than they are.

Empathy is the cousin of understanding. And without understanding, communication is always going to be difficult.

In their defence, I was no different. When I was 16, anyone over 30 was really old. When I was 30, a 60 year old seemed positively geriatric.

But ageist hiring begets ageist marketing, so the origins are not so much the fault of marketing teams themselves, but rather those who decide who is on those teams.

It’s unconscious bias at its worst. It results in stereotyping and discrimination – something which the young are especially keen to call out - but only it seems when it’s about gender, sexuality or ethnicity.

Brands which either appeal only to the young and/or alienate the mature are setting themselves up as hostages to fortune if they choose to stake everything on the fast-changing and transitory loyalties of the young.

It just doesn’t make commercial sense to target only young people when older demographics are higher spending and less fickle. Chuck Shroeder, a former director at ad giant DDB and now 71 said:

“Advertisers assume that the “old” people of today are some monolithic group of codgers who don’t know anything. Product managers are all young and they don’t want advice from people who could be their grandparents. They have the same attitude I had when I was 30, largely based on hubris and youthful lack of experience. They don’t grasp that they could sell more product if they actually talked to the people who have the money.”

Asked to give examples of ageist ads, he said:

“I nominate the Esurance commercial with the elderly lady who is bragging to her friends that she saves time by posting her vacation photos on her “wall” rather than mailing them. We see her living room wall with pictures stuck on it. Funny eh? It implies that we old folks know nothing about Facebook, even though Facebook has more users over 50 than under.”

Last week I observed a brand in action which would convince any young marketer to rethink their entire preconception of older demographics. But guess what, there were no young people there to witness this live case study of brand loyalty in action.

This is a brand which has endured 50 years of highs and lows, drug and alcohol traumas, fickle fashion changes and more.

I went to see hard rock band UFO play a sold out concert in Cardiff. This band was founded in 1969 and it has been touring constantly ever since. Founder and vocalist Phil Mogg will be 71 this year. The concert hall was packed with men almost none of whom were less than 40 years old. And whilst they didn’t have a mosh pit, they were jumping and singing along just like any audience of on-trend hipsters. This was no chamber music or smooth jazz. It was a loud and sweaty rock spectacular:

This was brand loyalty by the over 40s in plain sight. This tour is sold out nationwide. It’s the very real, cash-till ringing manifestation of 50 years of customer loyalty and spending. And a wake up call to everyone in marketing who thinks older men spend their time and money on gardening and golf. Or hula hooping...

Wake up and smell the coffee kids.

P.S. I learned with great sadness that a few days after this gig, Paul Raymond, seen above on keyboards passed away unexpectedly following a heart attack. As a more or less permanent member of UFO, he will be greatly missed. My condolences go to his friends and family.

Career survival in the age of surveillance capitalism

By Neil Patrick

In my last post I described the rise of surveillance capitalism. I also promised to provide some thoughts about how we can protect and grow our career prospects in an age where big data is deciding what we get to see, what sort of people we are and what we want.

The terrifying thing about this is that without our consent, algorithms are deciding on behalf of others what we deserve. It’s an Orwellian universe in which we are pawns, valued, categorised and ranked according to our digital footprints.

If you think I am being sensationalist, then I present Google founder, Larry Page’s disclosure of the corporation’s totalitarian ambitions as reported in Harvard Professor, Shoshana Zuboff’s earth-shattering new book, ‘The Age of Surveillance Capitalism; the Fight for a Human Future at the New Frontier of Power’.

As Zuboff says, “Page portrays Google’s totalistic ambitions as a logical consequence of its perfection of society. From his point of view, we should all welcome the opportunity…to willingly subordinate all knowledge and decisions to Google’s plan.”

And people are at the centre of this bid for god-like power. Page said, “…we have to understand the things you could buy, and…we have to understand anything you might search for. And people are a big thing you might search for. We’re going to have people as a first-class object in search…”

In other words, Google sees its collection of data about people, including you and I, as central to its mission to change the world into a shape of its liking. I don’t know about you, but I consider this a very poor deal – I provide every piece of information about myself to a corporation over which I have no influence in exchange for some digital apps and services. Thanks Larry, but no thanks.

If like me, you’d rather not submit to this assumption of control over your essential human rights to privacy, then what follows are my initial thoughts on reasserting some sort of control rather than sleepwalking into enslavement.

I cannot provide a bullet proof set of rules which guarantee results. At best, what follows is what I consider to be sensible practices for damage limitation. Any thoughts and additions others can provide will be extremely welcome in the comments section. Or contact me through LinkedIn or Twitter and I’ll do my best to add any contributions by means of updates to this post.

My thoughts and recommendations:

Assume everything you do online will be stored insecurely and shared

Plenty of data collectors and users will argue that they never share data. The truth is that even if they do not, there are so many loopholes within current data protection rules that the only safe assumption is that everything we do which involves an internet connection is visible to someone somewhere and those people likely don’t care much about our privacy.

Assume that you are a brand

Personal branding has been around for a while now. And it generally sucks in my opinion. It’s a spin off from social media culture in which individuals seek to market themselves with a view to securing fame and fortune. So I’m not talking about that. What I mean is that if you think of yourself as a brand, you’ll be less likely to do something which devalues your brand. Examples are easy and obvious – putting pictures of yourself onto social media which present you in a dubious light; expressing political opinions online; attacking others online – all these are brand damaging and will consequently have adverse career impacts.

Don’t let your rights to free speech work against you

On the one hand I place high value on free speech, on the other, what price am I personally prepared to pay to exercise my rights to say what I think without restraint? Each person must make that decision for themselves, it’s not for me to say what you can and cannot do. My belief is that we should never say or do anything online which others could perceive negatively.

Align yourselves with others online who will reflect well on you

I am the first to admit I am especially interested in what less likeable people think and say. It’s the social media equivalent of watching horror movies. But if you choose to follow a load of people online who have less than admirable credentials, you can safely assume this will do your career prospects no favours. So choose your online friends carefully.

Support your online community and put others first

Whatever field you are in, it pays to show that you care about the other people who are in it. As Dale Carnegie said, 'You can make more friends in two months by being interested in other people than in two years of trying to get people interested in you.' In the social media age, this means investing more effort in sharing, liking and commenting on others' content than pushing your own.

Give your apps and subscriptions a makeover

Assume that every social media platform you are on and every app you use will be discoverable. Anything which a professional contact might consider shows you in a negative light should be unsubscribed or removed.

Check the permission settings on your mobile phone and turn off location tracking

One of latest revelations is that Google Android phones track location even when this is turned off, they claim to enable core phone functionality. My guess is that even when our phones are turned off, location tracking is working at some level. So turning this off, won’t completely shut it down, but it should reduce the incidence of unwanted ‘help’.

Review the settings on your home assistance devices such as Cortana, Siri and Alexa

If possible disable any non-on-command voice recording.

Last but not least, think about what you post online and how your boss or employer now or in the future would interpret it

Assume everything you post online is visible to everyone. You have to care about this. Free speech is important but does your belief in it warrant the potential sacrifice of your career opportunities?


It’s your call and these steps cannot give you complete control, but I hope they help preserve a little more of your personal privacy, autonomy and prospects. All comments and additions will be welcome in the comments below.

P.S. My good friend Marcia LaReau has been hard at work already with her solutions for jobseekers to this problem. You can listen to her short Vlog commentary about this here.

The price of peace in Europe and who paid for it

By Neil Patrick

How Germany lost the war but won the peace.

I first visited Germany in the early 1970’s. I wasn’t much more than a boy, but we had family friends in Nuremburg and as they were keen to learn English and we to visit Germany, regular trips were made. I already had a keen interest in history, and I was delighted to visit the enchanting streets of the medieval city with its imposing castle and immaculate half-timbered buildings.

Scarcely 25 years earlier, like most German cities, Nuremburg had looked like this:

Nuremburg, 1945.
Photo credit: US Army

Yet within a few years, the beautiful city centre was more like a Disney movie set. It was a fairy tale sort of place with not a trace of the destruction which had been wrought upon the ideological birthplace of the Third Reich:

Nuremburg castle today.
Photo credit: AlterVista 

I was too young to wonder how such a recovery was economically accomplished. But once I began my university studies of finance and economics, that question began to nag at me. How was such a rapid and complete transformation possible?

What provoked an even stronger curiosity was that if Britain and her Allies had won the war, how come we seemed to be impoverished while Germans enjoyed such affluence? Our own bombed-out towns and cities were like Soviet concrete nightmares in comparison. Bad town planning was a totally inadequate answer. I already had a sense that this was to do with big money...

The Germans were tight-lipped. Post-war Germans had a collective amnesia. They didn’t ever want to discuss what had gone on in Germany during the critical years of 1933-45. They were content to attribute their prosperity to hard work, ingenuity and self-discipline. And I fell for that line at first.

As the years passed, I never lost my interest in this enigma. But more recently as Brexit has taken the centre stage of British and European politics, I felt it was high time to revisit the question, for it sheds useful light on the potential future for both the UK and the EU.

Today I think I have a fairly accurate picture of exactly how this economic ‘miracle’ was achieved. But I don’t really believe in miracles and this was indeed not one. Instead, the truth lies in murky deeds and events which are largely unknown or forgotten unless we look into the darker recesses of political and monetary history.

Like almost everything to do with post-war Germany, the roots are to be found in the leadership and ideas of Hitler's Third Reich. In fact Germany’s immediate post war economic plan was created under the auspices of SS chief Heinrich Himmler. In 1943, he tasked SS-Gruppenfuhrer Otto Ohlendorf to lead a panel of economic experts to plan the finances for Germany after they’d won the war. Ohlendorf was also leader of an Einsatzgruppe in Russia, found guilty at the Nuremburg trials of mass murder and hanged for his crimes.

Otto Ohlendorf.
Photo credit: Bundesarchiv
Bild 183-J08517 / CC-BY-SA 3.0

Ohlendorf’s economic planning panel included Ludwig Erhard, future Chancellor of West Germany (1963-66) and banker Karl Blessing who was to become President of the Bundesbank (1958-69).

Ohlendorf’s team recognised that Germany’s wartime economy would be unsustainable in peace time. During the war, it was propped up by massive money printing (which today would be called Quantitative Easing), the comprehensive pillaging of wealth from occupied nations and individuals alike, the engagement of slave labour and the denial of luxuries to most of the civil population of Germany.

The other key tool was the sale of Reichsmarks to conquered nations at vastly inflated prices – something which today we’d call Forex fraud. We think of Nazis today primarily as murderous zealots, but genocide was just the top of the pyramid of Nazi criminality. Theft and illegal financial transactions were just as much a part, and ones which would continue to yield enormous benefits to Germany long after the killing was stopped.

The absence of goods to buy in Germany imposed an enforced savings regime on Germans; there was little they could buy other than the basic necessities for life. In the (then expected) wake of Germany winning the war, these tools of economic exploitation and fraud could no longer be relied upon. So how could post-war Germany maintain its financial well-being in the wake of victory?

It was Erhard who came up with the radical answer. He proposed that the Reichsmark would be abolished and replaced by a new currency called the Deutsche Mark. But here’s the trick. Savers (which everyone was whether they liked it or not) would have their Reichsmarks converted to Deutsche Marks at a ratio of 15 Reichsmarks for a single Deutsche Mark. Business assets however would be converted at parity i.e. 1:1. At a stroke, the savings of German people would be wiped out, but business assets would be preserved and bolstered. It was in effect a massive wealth transfer program from the German public to Germany’s political, industrial and business elite.

The plan had a fundamental flaw however – it assumed Germany would win the war. By 1944, this was clearly not going to happen and so the Ohlendoft/Erhard plan was quietly shelved. However circumstances would lead to this plan re-emerging and being implemented sooner than anyone would guess…

Less than three weeks after the successful D-Day Allied landings in France, Franklin Roosevelt was also thinking about how to organise the German economy after the Allied victory. He set up a meeting for representatives of the forty Allied nations at the New Hampshire Washington Hotel in Bretton Woods. Here, the leading economic minds of the time would determine how to treat post-war Germany and financially restructure the world in the aftermath of the bloodshed. The UK dispatched John Maynard Keynes, probably the pre-eminent economic theorist of his day. He had been highly influential on the leading US delegate, Harry Dexter White.

But Keynes the mentor and White the student were to clash. Keynes' proposal was brimming with intellectual power. White was buoyed by the emerging US power vested in its economic and military might. Keynes advocated a globalised system which would stabilise global capitalism for decades to come. White sensed the winning hand was his however and sought to reshape the post-war world into a deal which made the US the pre-eminent global economic superpower. In what became termed ‘the New Deal’, he placed the dollar as the world’s reserve currency (there could really be no other contender) and the one to which the post-war currencies of nations in Europe would be pegged.

It was inevitable White would win. As a final blow to Keynes, when weeks later they met to discuss the softening of terms for the repayment of US war loans to Britain, White was implacable; there would be none. Distraught at this outcome, Keynes was to suffer a heart attack within days of his return to Britain and died at the age of 62. His failure was also to ensure the UK was repaying war loans to the USA until 2006.

The inescapable fact was that in the post-war world, only one nation had escaped economically more or less unscathed - the USA. By 1948, the new world order was becoming plain. The Cold War was a reality and Germany’s critical role in the NATO - Warsaw Pact balance of power was obvious. Without economic assistance, West Germany’s reliability as the bastion of the West was in question.

Erhard and his colleagues took their old plans out of the drawer. According to Handelsblatt, 25 June 2006:

'On 20 April 1948, a heavily guarded bus with opaque windows brings them to the airbase at Rothwesten near Kassel. There, after weeks of persuasion, the German experts get the representatives of the Allies to go along with their concept: on 20 June 1948, small savers lose everything, whereas owners of shares and material goods lose almost nothing…Erhard’s policy has one aim and one aim only: to support businesses in building up their capital. This he sees as the royal road to dynamic growth.'

Thus at a stroke, a Nazi economic plan for Germany was implemented three years after the end of WW2. But there was a big bonus too; the Marshall Plan was to see German debt (unlike Britain’s) written off. According to Professor Albert Ritschel in The Economist 25 June 2012:

'Here’s the core. German public debt in 1944 amounted to 379 billion Reichsmarks, roughly four times Germany’s 1938 GDP. Currency reform under the auspices of the US Army in 1948 wiped out this debt. To zero. From 1947 to 1952, the Marshall Plan bought West Germany a foreign debt holiday…that makes 465 billion Deutsche Marks of cancelled debt, still not including all deferred interest payments…Does that beat Greece? You bet.'

This then is the reality of Germany’s phoenix-like economic resurrection in the wake of losing the war and seeing its cities reduced to rubble. It is also why I visited such a wealthy and prosperous country in the 1970’s while my own was bleak and impoverished. From an economic perspective, the US restored Germany not just from the ashes of defeat, but also put in place the foundations which would see it emerge as the economic master of Europe, despite the US abandoning its financial aid to Germany in 1973, when the costs of the Vietnam War meant it was no longer affordable. America had its own home-grown problems to address by then.

From a British and US perspective, the liberation of Europe and the restoration of freedom to its people was accomplished at a very heavy price - not just the bloodshed of a generation. A debt which today’s European politicians would do well to remember I think.

Participate or perish – the implications of surveillance capitalism for your career

By Neil Patrick

The fourth industrial revolution will not be our saviour, it risks becoming our enslaver. Big data and the internet are assuming control.

We have entered a new economic age under immense ignorance about our personal data and its use by technology. Our human rights are not so much being abused, as being expropriated and monetised by information oligarchs who are all but invisible to citizens and governments alike.This power to shape behaviour for others’ profit or power is entirely self-authorising.

We are dazzled by the technological progress that the fourth industrial revolution promises. We are also blind to the invisible ways in which the digital world is assuming control of our very existence.

There is a fundamental problem even with calling this the fourth industrial revolution. That’s because this title implies that it is relational to previous industrial revolutions. It is not. Previous industrial revolutions delivered mechanical, transport and communication advancements. The fourth industrial revolution is capitalising on our very thoughts and actions.

It has no foundation in democratic or moral legitimacy, as it usurps decision rights and erodes the processes of individual autonomy that are essential to the function of a democratic society. Once I was mine. Now I am theirs.

And it is rolling out at breakneck speed, so fast that the legal and regulatory powers we trust to protect our lives and society are being left in the dust.

The relationship between speed of change and human lifespans is critical for survival.

If we experience fundamental change over the course of our entire adult lives, we have a fair chance to adapt and survive. When fundamental change is happening in more or less real time, we struggle.

The First Industrial Revolution involved the transition to new manufacturing processes in Europe and the US, in the period from about 1760 to 1830. It therefore took around 70 years – in other words more or less the average lifespan of a human being.

This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, the increasing use of steam power, the development of machine tools and the rise of the factory system.

The economic models associated with the first industrial revolution were the transfer of capital from a feudal elite, to a new class of commercial/industrial elites who owned and controlled not land but the resources and means of manufacturing production.

The Second Industrial Revolution

This took place between 1870 and 1914. It therefore happened within a period of forty years or so; about half a human lifespan. It used new power sources such as electricity and the internal combustion engine to expand communications, domestic comfort and personal mobility. Major technological advances during this period included the telephone, light bulb, phonograph and the internal combustion engine.

A key socio-economic change associated with the second industrial revolution was that women were increasingly freed of many domestic chores and their political emancipation enabled them to choose to free themselves of economic dependency on their husbands.

The Third Industrial Revolution

The Third Industrial Revolution, or the Digital Revolution, refers to the advancement of technology from analogue electronic and mechanical devices to the digital technology available today. The era started during the 1980s and was essentially mature by the early 2000’s. It therefore took around 20 years or about half the duration of the Second Industrial Revolution.

Advancements during the Third Industrial Revolution include the personal computer, the internet, and information and digital communications technology.

The economic characteristics which emerged in the Third Industrial Revolution were the rise of globalisation, the industrialisation of second world nations and the rise of disruptive business models.

The Fourth Industrial Revolution 2015 - present

This is fundamentally different from the previous three, which were characterized mainly by advances in technology. The fourth industrial revolution involves advances in what is called ‘connectivity’ rather than technology. Advocates claim this development has great potential to connect billions more people to the web, drastically improve the efficiency of business and organizations and help regenerate the natural environment through better asset management.

I don’t see it like that at all. That’s because these are merely technical possibilities. Whereas what determines what ultimately happens to our society hinges not on what is technically possible, but what is commercially advantageous to capital and investment.

Much scarier than Steven King...
 Zuboff lays the truth bare in her new book.

This is what Harvard professor Shoshana Zuboff has termed, ‘surveillance capitalism’.

Her definition of surveillance capitalism is:

1. A new economic order that claims human experience as free raw material for hidden commercial practices of extraction, prediction, and sales;

2. A parasitic economic logic in which the production of goods and services is subordinated to a new global architecture of behavioural modification;

3. A rogue mutation of capitalism marked by concentrations of wealth, knowledge and power unprecedented in human history;

4. The foundational framework of a surveillance economy;

5. As significant a threat to human nature in the twenty-first century as industrial capitalism was to the natural world in the nineteenth and twentieth;

6. The origin of a new instrumentarian power that assets dominance over society and presents startling challenges to market democracy;

7. A movement that aims to impose a new collective order based on total certainty;

8. An expropriation of critical human rights that is best understood as a coup from above; an overthrow of the people’s sovereignty.

Surveillance capitalism is essentially parasitic. It feeds on the data that we all create though our engagement with the digital world. Google was the first to monetise this through the creation of targeted online advertising but today Google is applying the same business model to other applications. Apple, Facebook and Amazon have all followed in Google’s footsteps.

The big data we all create is the raw material for surveillance capitalism. It’s all but invisible and is given away for free. It operates largely without our knowledge. The legal basis for its use is hidden inside the endless pages of legal mumbo jumbo which form the basis of every user terms and conditions document we consent to every time we sign up to a digital service or platform.

The law and our institutions have been completely blindsided by the fourth industrial revolution. And that is because of the speed of mutation of surveillance capitalism. The EU’s General Data Protection Regulation Rules (GDPR) which were introduced in 2018, began being drafted in 2012. They reflected the digital world as it was then, not as it is now. It’s little wonder therefore that it’s already hopelessly out of date and that the surveillance capitalists have moved on, leaving the regulators flailing in their wake.

Surveillance capitalism is now becoming the technology framework that underpins our career opportunities just like every other aspect of our lives. If you think career technology is Linkedin, job boards and online job ads, you’re about ten years behind what is happening. The latest recruitment technology is pulling data from places you’d never even think about. If your smart fridge is ordering mostly beer and pizzas, if you use online gambling, if you take a payday loan - that data or parts of it will find its way sooner or later into the data sets the internet holds about you. For better or worse, but most likely worse.

We can choose not to participate. We can choose not to use social media, or online shopping, or read online news reports. To live outside the digital grid. It’s increasingly difficult, but you can become digitally invisible. But in the age of surveillance capitalism, doing that is to choose to perish.

We all need a strategy to cope. To mitigate the exploitative forces which are at work, and as much as possible turn things to working for us rather than against us. Boycotts and protests are not a practical or realistic answer. But there are things we can do to reassert our own power of self-determinism. But that's for my next post here.

In the meantime, if you're not scared half to death already and you want to reassert some control, my friend Marcia LaReau at Forward Motion Careers has antidotes ready. I recommend you read her blog post, You are Being Stalked here.

HR data and analytics drives profits but at what cost?

By Neil Patrick

HR analytics can punish your employees, but you won’t worry about that if you want to win.

In his 1976 book, 'Computer Power and Human Reason: From Judgment To Calculation', author Joseph Weizenbaum laid out the case that while artificial intelligence may be possible, we should never allow computers to make important decisions, because computers will always lack human qualities such as compassion and wisdom. Weizenbaum made a crucial distinction between deciding and choosing. Deciding is a computational activity, something that can ultimately be programmed. But it is the capacity to choose that ultimately makes us human. Choice, however, is the product of judgement, not calculation.

Stephen Hawking went even further when he said,  "...the development of full artificial intelligence could spell the end of the human race. Once humans develop artificial intelligence, it will take off on its own and redesign itself at an ever-increasing rate. Humans, who are limited by slow biological evolution, couldn't compete and would be superseded."

I cannot say if this distopian vision will or will not ever manifest. But it is plain to anyone that we are racing down this path with scarcely any care. We are already seeing the first applications of big data and AI based workforce decision and management systems. HR leaders like it because it promises to solve several of their most longstanding and vexing problems.

HR has been fed up forever about not being taken seriously. HR big data and analytics promises to be their saviour. It suggests that HR can transition from being perceived (wrongly in my view) as fluffy and utilitarian to having a proper seat at the leadership table, because like its rivals in finance, sales and marketing, it can now deploy hard ‘scientific’ data to back up its proposals.

It also promises a happier, more engaged workforce. One in which every twist and turn of employee sentiment can be quantified and responded to. If the data says people are feeling worse about something, HR can know this quickly and help rectify the problem.

I wish this were true. But I fear the opposite. That’s because every technological advance includes the option of being deployed for good or evil.

What HR may not like so much is that HR data delivers an extremely useful tool for business leaders to push and punish people. It’s a deal with the devil, in which HR’s quest for happy, engaged workers, risks being hi-jacked by the rest of the business to brutally force up productivity and drive down cost.

Incidentally, my argument skims over the very real practical questions around HR data and its inherent unreliability as Marcia LaReau has convincingly described here in her post, ‘To a Hammer, Everything is a Nail’.

Business has some critical problems today. Growth and profitability are chief amongst these. And countless studies show there is little correlation between hard profit and employee satisfaction. Sure there are plenty of examples of firms growing successfully who also invest in their people. But when we look at the most established large firms who are making the most money, most care much less about their people.

This is actually a very simple economic truth to understand. In an open competitive market, whoever gets the most work done for the lowest cost, wins. And if that means some people suffer, then so be it.

Every employee survey I have ever seen identifies that a person’s manager is the single greatest determinant of job satisfaction. It’s not pay, it’s not perks, it’s not flexible hours. It’s the person who manages you. If they are inspiring, caring, transparent, supportive, their staff will enjoy their work.

But here’s the problem. Managers that display these qualities are becoming an endangered species. Because their bosses usually don’t care very much about strategic HR. They do care about smashing their immediate revenue and profit targets. HR gets people hired for them, sorts out people issues and keeps them out of court. Everything else is fluff.

It’s that simple. Good leadership (not data) delivers happy and productive teams.

But we also know that good leadership is a frustratingly elusive and expensive resource to acquire and maintain. One accidental bad hire of a psychopathic manager and the whole of an organisation’s carefully nurtured culture can be demolished in a few months.

So if good leadership is expensive and scarce, but data is cheap and plentiful, the choice becomes a no-brainer.

What is becoming visible now is that there are firms who take HR data very seriously. And what we can also see is just how punishing and dehumanising the application of HR data can be in practice. To verify this, all we need to do is examine the firms where HR data is most developed and embedded in the day to day operations of the organisation.

And right now, probably the most advanced organisation in this field is Amazon. In January 2019, Amazon became the world’s third most valuable company by market capitalisation, after Apple and Microsoft.




Yet in some US states, nearly one in three Amazon workers are on food stamps. For Amazon, this is even better than paying people almost nothing. It is the transference of part of Amazon’s wage bill to the taxpayer.

In Amazon warehouses, every second of people’s work is measured and evaluated. They may walk over twenty miles on a day’s shift. Their productivity is tracked and ranked against their peers, with whoever is at the bottom of the table likely facing disciplinary actions and threats. A toilet break can cost you your job if it exceeds a tightly prescribed time allowance. Many describe it as a daily hell, which they endure only because they have few other options.

Welcome to the brave new world of HR big data. It’s being corrupted from the get-go. And if you’re an HR leader, be careful what you wish for.

AI in recruiting really means ‘abdicated intelligence’

By Neil Patrick

What is advocated and marketed as technology-enabled recruitment processes increases the difficulty in finding and retaining great people. The best people are made not found. We don't need to get better at ranking people by increasingly tightly defined data points, we need to take ownership of our responsibility (and self-interest) to find good people and make them great. 

Artificial intelligence is the big topic in almost every professional field right now. From drones in farming to robot surgeons, the overriding narrative is about the tasks which AI will enable us to perform better, faster and cheaper.

HR and recruitment are no different. The application of AI is spreading like wildfire as new tools are developed which expand the range of tasks that AI performs to assist recruitment management processes.

Until now, it was relatively simple to integrate the digital world with our own professional world. Have a LinkedIn profile which is properly constructed. Expand our professional networking onto one or two social media platforms. Write some commentaries or blog posts. By these means, anyone checking us out could easily discover our credentials.

Some people understandably chose not to participate or did so in the most cursory way possible. They had no wish to participate in the online race. They had fears about privacy. They didn’t understand how social media worked. They had better things to do with their time. All these were legitimate grounds to not participate. But not anymore because…

This is now all set to change

The next wave of AI and big data is going to transform the processes of hiring way beyond anything we’ve seen to date. Traditional recruitment is a gruelling, complex process for employers and recruiters alike. Recruitment teams have to be heavily incentivised to commit to the heavy workloads involved. And this costs money. A lot of money. But AI will streamline and speed up these processes. It will be able to identify suitable candidates in a few seconds. It will message the chosen few and chatbots will perform initial screenings. Candidate selection decisions will be made on the basis of data and scoring algorithms rather than fallible human interactions. Very little human intervention will be needed.

Recruitment costs will fall even more. Hiring efficiency and speed will increase. Hiring choices will be validated and justified by the ‘scientific’ methods involved.

At least that is the vision. The reality is more worrying.

Why it’s flawed

Data is not science. The principal predictors of job performance cannot be discovered by algorithms. The first attempts to automate the selection process created a bigger mess than before. Online job boards and applicant tracking systems (ATS) drove application numbers sky-high and candidate quality tumbled. But acquiring 500 applications cost around $50. Using a professional head hunter costs about $30-$40,000 per hire for professional vacancies. These economics ensured that automated recruitment processes took hold and continue to grow in usage.

Nick Corcodilos explains in this video why the application of data driven metrics to recruitment ensures that employers miss many of the best candidates for any given role:





I agree with everything Nick says here. This process is flawed. It cannot find the best people because the available data points cannot determine that they will perform well on the job. And because quite a few of the very best people choose not to present themselves online in their professional capacity. Yet for all its weaknesses, automated recruitment is only going to expand because the cost differential is so compelling.

In a strong and growing economy, organisations can invest in quality processes. In an economy which is uncertain and faltering, when profits and growth are elusive, focus inevitably shifts to cost reductions. Cost trumps quality in such times.

Your career is at risk if you choose not to participate

It seems logical to me that the current and anticipated applications of technology and artificial intelligence in recruiting will continue to erode the quality of hiring decisions made. This may deliver short term cost gains, but will push up long term costs as turnover rises and employee performance falls.

Yet this is not my greatest worry. My fear is that the relentless advance of this technology will create a new underclass of smart, educated and capable people who have chosen for legitimate reasons not to present themselves online. These people will become completely invisible to the data capture bots. And that invisibility will slowly but surely eat away at their employment opportunities.

There’s not a ‘talent shortage’, there’s a leadership vacuum

 
For organisations, the deployment of recruitment AI encourages organisations to abdicate their responsibility to create and nurture their own human talent pool. This creates a downward spiral of ever increasing data point discrimination reinforcing the mythology of what employers disingenuously call their ‘talent shortage’.

And if the belief in the pseudo-scientific reliability of these systems persists within management, we will see the abdication of leadership’s responsibility for taking good people and helping them become great. Instead, the tools will be adjusted to cure perceived shortcomings, when the real shortcomings are rooted in the mistaken faith in progress through technology.

Artificial intelligence is well named. Because it’s not real intelligence…

PS. My good friend Marcia LaReau at Forward Motion Careers has a great post here about what jobseekers can do to avoid becoming a victim of this situation.