Corporations,
marketers, and governments are exploring the practical and legal limits of
collecting and utilizing Big Data. One
man began thinking about its value decades before anyone else, and he’s
revealing his professional insights, personal experiences, and career triumphs
in recently released book, Matters of Life and Data: The Remarkable Journey of
a Big Data Visionary Whose Work Impacted Millions --Including You.
“The man who
opened your lives to Big Data finally bares his own,” reads the introduction to
this most stirring memoir. Indeed, he has much to share, as Morgan, 72, should
know a few things about Big Data. The company he helped grow into a technology
and marketing powerhouse, Acxiom, is a world leader in data gathering and its
accompanying technology, and has collected over 1,500 separate pieces of
information on some half a billion people around the globe.
His book, which I
have the honor of promoting to the news media, recounts and celebrates a journey
from his modest upbringing in a small town on the Arkansas River to his role as
one of America’s all-time Big Data visionaries. During his 36-year tenure,
Morgan grew a small data processing firm of 25 employees into a global
juggernaut by becoming one of the largest aggregators of data and consumer
information in the world. He transformed the small data processing company into
a publicly held, $1.4 billion corporation with 7,000 employees and offices
throughout the world.
Morgan took the company public by age 40
and oversaw significant growth. Annual revenue grew from 7 million to 90
million dollars from 1982-1992 and then it grew to more than a billion by the
end of the 1990s. Morgan retired from the firm in 2007 after a buyout deal with
Value Act and another private equity firm fell through.
Here is a Q & A with Morgan:
1.
How can we protect the privacy of
individuals but still allow companies to benefit from the use of Big Data? Big
Data has the potential to do a great deal of good in our world today and for
many years to come. On the other hand, Big Data will create a lot privacy
issues. Today, much more data is being
recorded about each of us than you might imagine. In February 2015, for
example, Samsung admitted that their new TVs will be collecting data about the
people who watch them. That data will include voice data (what you say about
what you are watching), picture data (your expressions as you watch), and
viewing data. Samsung of course claims that this data will only be used to
improve the quality of the overall experience of using their product. Do I
believe them? I don’t doubt that this is what they intended these
data-collection TVs to do, but it sure doesn't take much imagination to see a
great potential for misuse of such data. We will never be able to
write enough laws to totally solve this problem. We cannot stop companies
from using data that improves the quality of products and services.
However, we must somehow protect ourselves from misuse. At Acxiom, our
motto was “consumer privacy is a state of mind.” It didn't matter if something
was legal; the question should be posed, “Is this right? Is this the way we
would want to have our data collected and used?” Companies have to have education
programs for their employees and create that state of mind—that the security of
people's personal data is important to our whole society.
2.
If you were to advise an
entrepreneur looking to launch a company today, what three things would you
share? By their very nature most entrepreneurs are very
optimistic people. When they have an idea, they believe that it can be
developed and made commercial with much less effort than it generally takes. My
executive summary is this: It’s going to be a lot harder and take a lot longer
than they could ever imagine. First, entrepreneurs must be sure that the
product they have is real and the
plan they have is real. By that, I mean that the
product and plan can be converted into a commercial success. It's very easy for
people to fall in love with their own ideas and to want to ignore all the
pitfalls and the downsides. A product plan and a marketing plan are essential
to test the basics of whether this thing that they’ve come up with is even
practical. Marketing is where most plans
fail to be realistic. For example, be
sure the cost of acquiring new customers is real. Second, I would say that when you’ve
convinced yourself that this new idea of yours has potential, then try to
enlist the support of others. No person by himself is going to be successful
developing an entrepreneurial idea. It takes a lot of people, and all those
people have got to believe strongly in the concept that is being developed. If
enlisting others is impossible—or even very difficult—then examine once again
the practicality of the whole business idea.
Finally, and most importantly, the developer has to be sure that he or
she has access to adequate capital to develop the business. All too often
people think they'll be able to get more money after they show how cool their
idea is. Most often that additional money is never found and the team just
wasted a lot of their own money and some of their friends’ money. Best rule: Line up two times the money you need
to get to phase 1—and you will be lucky to squeak by with that much.
3.
You say that Acxiom Corporation,
a world leader in data gathering and its accompanying technology, has obtained
some 1,500 separate pieces of information on over a half-billion people
worldwide. How do we make sure the information is not used wrongfully? I had
great concerns about the possibility of data misuse at Acxiom. We had literally
hundreds of thousands of data files with extraordinary amounts of in-depth
information about everyone who lived in the United States and many in Europe. I
developed a philosophy that we could not create enough rules at Acxiom to solve
the problem. Eventually I came to believe that creating an atmosphere and
culture of data protection was the best answer. We chose to educate our people
and to create a simple set of rules. For example, the “do right rule” taught
our employees to think about the data that they cared for as data about people
just like themselves—in fact, it could even include their own family members.
So treat that data like you would want your own data to be treated. Of course there were more complex rules that
applied in all of our data practices. There were—and still are—laws that
protect people’s credit data. Credit
data could only be used for preapproved credit offers and not for other kinds
of marketing. To help oversee all this process of education and oversight with
our employees and our customers, in 1991 I appointed a chief privacy officer.
Jennifer Barrett became the first chief privacy officer in the United States, and
today she still holds that position at Acxiom. Jennifer has become a global
leader in marketing data use and data protection.
4.
You helped build your own race
car, having won numerous races including the 24 Hours of Daytona and the 12
Hours of Sebring. What kind of rush did you get going 150-160 miles per hour?
Did you ever crash? At the ripe old age of 58, I was driving at
Daytona in my last event before retiring from professional racing. I was in a
Ferrari 333 SP in the middle of the night, and on the front straight I was
regularly hitting the rev limiter—a device designed to restrict the maximum
speed of an engine. I came into the pits and asked the engineer how fast my car
was going when it hit the rev limiter. His answer was about 205 miles an hour. Admittedly, that was quite a rush, but most of
the time as a race car driver you’re totally unaware of the speed at which
you’re traveling. Your goal is to go as fast as you can without crashing or
tearing up the car. In my heart I’m a geek and an engineer. I liked designing
and building cars as much as I liked driving. My son and I drove several races
together, including a major race in Canada that we won in a car I designed.
That was as big a rush as going 200+ miles an hour at Daytona. Other than the
fact that I occasionally went 200 miles an hour, I was a pretty cautious
driver. If I crashed I had to pay for it, and we might not have enough parts to
fix the car at the racetrack, ending the weekend for me. As a result, I didn’t
have all that many crashes. But you can’t drive race cars for 25 or 30 years
and not be involved in accidents. I had
my share of driver errors and mechanical failures that resulted in some pretty
serious wrecks. I hit the guardrail at Watkins Glen racetrack doing nearly 150
miles an hour. Earlier in my career I hit the wall at Road Atlanta and was
helicoptered off to the trauma center. Fortunately, in neither case was I
seriously hurt. The Road Atlanta
accident had an amusing sidebar. I was in the trauma center all by myself, plugged
into all sorts of stuff. The door to the trauma center kept opening and closing
with hospital personnel sticking their heads in the door—only to quickly turn
around and leave. Finally, I heard one complain loudly, “That’s not
Paul Newman.” Paul Newman was racing at road Atlanta and the rumor had gone
around the hospital that he was in the trauma center, but to the staff’s
disappointment they found only me.
5.
You’ve also raced motorcycles and
flown jets. How does the adventurous side link to your business life? Some
amount of measured risk-taking occurs when you race cars, drive motorcycles,
and fly jets. By the same token, most successful entrepreneurs are by their
very nature risk-takers. They would never have started that business or risked
their family fortune without being able to stand a certain amount of risk. Also in business, you have to believe that
you’re going to be successful and overcome those risks. By the same token, you
don’t enter a race and think, Oh goodness, I might crash
and hurt myself. I always wanted to manage my risk to the greatest
degree possible. I’ve never raced so hard that it was win or die, and I’ve
never bet everything on a business venture. Well, almost never.
6.
You are the CEO of your latest
tech venture, PrivacyStar. It’s been seven years since you stepped down as
chairman and CEO of Acxiom. What did you still find rewarding—and
challenging—in trying to grow another company? Creating
and building a small company is a lot more fun than trying to manage a much
larger company. Sometimes at Acxiom I felt like I was trying to herd cats as I
provided leadership on a multitude of fronts. Many parts of the public company
CEO’s job are really not very enjoyable. You have to deal with lawyers and
boards as well as many other distractions, like unfriendly press. I always wanted to spend as much time as
possible on new product development and leadership activities at Acxiom. Down
deep in my heart, I felt like life was being sucked out of me by activities
that were beyond my control. There were things I just had to do and couldn’t
get out of but I sure didn’t like them much. I felt like I didn’t have enough
time to do the job that would contribute most to the growth and success of
Acxiom. In a small company like PrivacyStar, I am able to spend much more of my
time working on things like new product creation and development. We are doing
things that no one else is doing in the mobile space. We built ourselves from a
big money loser to a profitable company. That is fun. There’s still a lot of
work and worry, but the overall satisfaction level is a lot higher for me when
I feel more in control of my destiny and doing things that I enjoy. If we miss
a quarter at PrivacyStar, it’s only us who are disappointed, and there are no
newspaper headlines.
7.
While working at your first job
at IBM as a systems engineer, you were called back just a few days into your
honeymoon due to an urgent office matter. Was this the beginning of your career
consuming your life? I was shocked, only a few days
into my honeymoon, to receive a call from my new boss who said, “Charles, we
need you back in the office.” He knew where I was because he had come to the
wedding in Fort Smith, all the way from Little Rock. Without too much protest,
my wife of just a few days agreed that we could go back to Little Rock and I
could start work. My first job at IBM
was to get involved in a troubled installation of a computer on which I’d had
absolutely no training. I had to teach myself what I needed to know in order to
help get these problems resolved. I did that in a number of other situations
that seemed to follow one after another. I was working all day and studying
many nights to try to figure out how to achieve a good result for one customer
or another. That was the story of my early experience with IBM. I was either
working at a customer’s office—sometimes all night—or off on a trip to learn
about some new machine or learn some new skills. In those early days, IBM sent
new people off to school in the first two years for about 20 percent of the
year. During that time, I recall having at least two one-week schools, two
four-week schools, one six-week school, and one seven-week school. Those first two years were a compressed
learning experience. And my job was far from purely technical. Besides learning about programming and
design, I became very involved in the selling process, as well as in the
organizational process of being sure customers were properly prepared for their
new computers. The downside of all this
is that I became quite one-dimensional. It was all work and I had little time
for family or other activities. I was very successful at my job but not nearly
as successful at home and with my kids.
8.
Early on your company was in debt
and couldn’t make payroll. You asked people to cut their pay in half for a
period of time in exchange for paying them a more once you got past the dark
period. How did that turn out? We got to a point in 1976 when we
were losing money and were in danger of not being able to make payroll. Our
principal owners, the Wards of school bus fame, were in terrible financial
shape and they had no ability to help us out. There was no one to fire and no
way to cut expenses that I could see. So
I came up with the crazy idea that if we could make our payroll a third
smaller, we could survive. All we had to do was to get the top six most highly
paid people, including myself, to take a 50 percent pay cut. I can’t imagine
going to a management team today with such a scheme. We were working on some new very promising
opportunities that would make the company profitable if we successfully
completed them. I told everyone that they would get two dollars back for every
dollar of pay they gave up, should we succeed. I must’ve been very convincing
because they bought it and no one left. And not only did they double their
money, but through this crisis we also developed increased levels of trust and
a stronger bond within the top leadership team.
9.
To what do you attribute your
success in becoming a dominant force in the market database world?
Several things. We had a number of principles guiding our business strategy and
execution. One was to hire outstanding
people—we recruited intensely at area colleges and universities and were able
to attract the best and brightest young graduates. Another was to provide
world-class service to our customers, which helped us both acquire and keep customers. Take
Citibank—it became a customer in 1983 and is still a major customer of Acxiom’s
today. From our earliest days we also
put a premium on designing and creating leading edge software, and that gave us
a leg up in the marketplace. In the mid-1970’s, for example, we created a
revolutionary way to manage and deliver mailing lists for the Direct Marketing
industry. The List Order Fulfillment
System (LOFS) was faster, better, and cheaper than existing mostly manual
systems were at the time; more importantly, LOFS was more accurate. Another game-changer was called AbiliTec,
introduced around the year 2000. AbiliTec made large-scale name and address
data far more accurate than ever before, and to this day it remains a key
component of Acxiom’s technology arsenal. We created a business culture and an
organizational strategy that helped us be more nimble—and more efficient—than
most other companies our size. We
instituted formal initiatives that emphasized leadership, and we provided our
people with training in the qualities of effective leaders. We also did some pretty radical things, such
as doing away with corporate titles. When I gave up the title of CEO and
introduced myself simply as Acxiom’s “Company Leader,” I got more than a few
puzzled stares. All of these concepts worked together to create an effective
leadership team and to achieve solid results for our customers, over many years.
But satisfaction wasn’t limited to customers—employees liked the atmosphere at
Acxiom as well, and the company is full of people who have stayed for decades.
10.
You struggled with time
management. What advice do you have for
those consumed by any distractions and desires but who seek to manage and grow
a company? Being leader of a large
organization is a study in frustration for the top executive. Much of the CEO’s
time is commanded by the corporation and the duties of his position. Boards of
directors, top customers, and the company’s leadership team can eat up a
significant number of hours in a CEO’s day.
Over my 35-year career at Acxiom, I struggled to learn to be more
effective. In my early years, I thought I had to be involved, at least to some
degree, in virtually everything. But I knew I wasn’t very good at things like
accounting and administrative work, and in time I figured out that there were
people who could do these things better.
At first I was worried that they would screw it up and maybe I should
stay more involved. And of course I was right—they did screw up many times.
Finally, though, I figured out that if I delegated things to the right people
and showed them that I trusted them even though they occasionally failed, they
would end up doing a better job overall than I could in those areas. That was
one half of the equation—to shed the tasks where I could provide limited value
to the corporation. The other half was to develop techniques to allow me to
spend more time on the activities in which I could create the most value, such as research and development.
11.
What challenges did you need to
overcome as a leader during the number of acquisitions and mergers your company
participated in? Acquisitions are always very
difficult. When you finally get the deal done, which often takes months or even
years, the work is just beginning. Every situation is different and none of
them are without their challenges. A small one can be every bit as hard as a
big one. Technology integration, cultural differences, and distance are all
barriers to the smooth successful merging of two companies. I really don’t
think we ever got it truly right. I know that my being involved always helped.
Leaving small deals to others was often a bad idea. If a deal is worth doing at all, the CEO
should take an active role to be sure that the integration of the two companies
is accomplished successfully. With smaller acquisitions, probably the biggest
challenge was forcing myself to spend enough time with the management teams in
these acquired companies to make them feel part of Acxiom as a whole. The
leaders of acquired companies are always nervous in the best of cases. They’re
not sure how they’re going to be accepted by their new bosses. They’re not sure
what to expect or even how to act and respond to various things that they are
told or asked to do. They need to know
that they’re considered important and that they’re being listened to,
especially by the top guy. I found I couldn’t just move on to the next deal
until enough nurturing had gone on to ensure the long-term success of the
previous acquisition. Some of that nurturing could only be done by me.
12. When you took your company public, what opportunities and dangers did
this open up to you? When Acxiom went public in 1983,
it opened up many new opportunities for us. For example, it helped give us the
credibility that we needed to be able to deal with large banks and other
companies on the East Coast. The money created by the initial offering gave us
financial freedom and the ability to build buildings and buy computers that
were critically needed. On the downside for me, I now had shareholders and a
public company board looking over my shoulder. For the first 20 years of being
public, that was never a terrible burden for me or for Acxiom senior
leadership. But when Sarbanes-Oxley was passed and the new activism by
shareholders began, our lives changed forever. Ever-increasing amounts of my
time were devoted to board matters and dealing with shareholders.
Sarbanes-Oxley wasted a tremendous amount of time for us and created a great
deal of unnecessary expense.
13. What is your hiring and firing philosophy? My
philosophy was very simple—hire the very best people you can find. That
philosophy extended to the concept that you hire people when you can hire them,
not necessarily when you need them. Over the years I’ve hired a number of
people that I really didn’t have a job for at the time, but I knew they were so
good that we would eventually find a great spot for them. They were generally
some of the very best hires and made the biggest difference. Another key
component of my hiring philosophy is that the senior leadership of any company
needs to be very involved in the hiring process. Stars hire stars and duds hire
duds. People doing the hiring have to be sure they’re putting good people in
the right places. If you hire a superstar and put him or her in a dull and
boring job, it usually ends in failure both for the company and the
individual. Really good executives don’t
like to fire people. If they hire a person, then they feel invested in him and
want to see him succeed. When a hire isn’t succeeding, the tendency is to give
that person numerous chances before resorting to the pink slip. And then the
most common first statement after that firing is, “I should’ve fired him six
months ago.” So my philosophy, often not
followed by me, is that you know when it’s time for someone to move on. Take
action, make your decision now, and realize it’s the best for the person and
for you. Generally, you’re both in misery over it and know it’s coming, but you
keep putting off the inevitable while hoping for a miracle. I have to admit I
still do that. The upside of that is that you get a reputation for not making
snap decisions about people who work for you. I guess it’s a good thing, and
something that others respect you for, because you give a person multiple
chances. At the same time, others will say, “Charles took too long to make that
decision. I wish he was more decisive.”
14. At one point you eliminated everyone’s office title. How did that go? Eliminating
titles came about at Acxiom through a complex set of circumstances. We had
multitudes of titles just like most companies do today. We had directors,
senior directors, and associate directors. We had levels within levels. Acxiom
in the early 90’s was in desperate need of simplification. We had way too many bosses in our organization,
and management structure was getting in the way of getting work done. It was
just too hard and took too long to get anything accomplished. So we had to get rid of all those titles and
layers of management. We redefined the company into three layers and replaced
titles with roles and responsibilities for each person in the company. At the
highest level you had me—I was now the “company leader.” Working for me were
division leaders, and working for them were business unit leaders. That’s about
as simple as you can get, but it left an awful lot of people that once had
management titles, such as director, possibly with no title and nobody working
for them. As you can imagine, that was not an easy transition. We lost a few
people. All I can say is, we got through it and we became better for it. It
gave us a great deal more flexibility to move people around in the company
where they were needed. Things got done faster because there weren’t so many
signatures required.
15. Is this a good time for database marketers? Now
is the best time ever to be in database marketing. Today all successful
marketing programs have a significant component built around the database and
database marketing. Companies have access to much more data than ever and a
myriad of wonderful tools to help them analyze that data and create successful
programs. Still, it’s not magic. Database marketers have to be sure they have
the right software for their needs and have to apply that software properly.
That software must have access to accurate and relevant data for the kinds of
problems being solved. The old adage still applies—garbage in, garbage out.
Most people don’t realize that Acxiom’s true value-add during all those years
was just getting the data right so that marketers had good data to work with.
Many of our large customers employed some of the brightest database marketers
and analytic specialists money could buy, but before Acxiom their results were
spotty, at best, because of bad data. There’s a great deal of opportunity in today’s
world for people who possess a good blend of the skills to get the data right
and to apply the right tools to database marketing. As more specialized skills
are required, a number of subspecialties have grown out of database marketing.
For example, today you can have an entire career in just getting the data
right. To that end, the University of Arkansas at Little Rock now offers a PhD
in Data Quality.
16. Do you think the laws will change with technology as it relates to what
information is gathered, shared, and used?
Controlling the gathering and use of data has always been a complex problem to
administer. The Internet is making this problem almost too big to comprehend.
Certainly laws will have to be written and old laws amended to give basic
protection to citizens of the world. On the one hand, people say, “I don’t want
anyone using any data about me without my permission”—even as those same people
post everything about their private lives on Facebook. On the other hand,
companies say, “We’re going to protect the consumer and their information”—even
as those same companies are putting cameras and listening devices in their TVs
to collect information about viewing habits.
Much of the data that companies collect for a specific reason is used to
benefit consumers. The problem is that the quantity of the data that is being
collected, by electronic devices and over the Internet, is growing
exponentially today. Access to the data that companies collect is usually
carefully protected, but not always. There have been a number of widely
publicized situations in which well-respected companies have gotten in hot
water for collecting and using data improperly. Additional laws are going to be
complex to write, but are certainly needed to cover potential Big Data abuses.
We do have examples of successful laws, such as the Fair Credit Reporting
Act—25 years and counting, and that law is still serving us well. The best way
to solve these problems is not to rush to a conclusion, but to get industry
involved in making recommendations in new areas like the Internet. All I can
say is, I’m glad I’m not a legislator or a lawyer, because I really don’t have
great answers in this area.
Big
Data
by
Charles D. Morgan
Today we hear the
term “Big Data” all around us, and I want to clarify what we’re talking about.
The term Big Data generally refers to extremely large masses of unstructured and partially structured
data that typically has some kind of content that can be used for marketing, or
for business decision-making, or even—as you see in my book’s prologue --for
tracking bad guys. Unstructured data only started becoming a factor in the late
1990’s, and very much so in the 2000s.
Back in ’70s and
’80s, though, we didn’t even use the term Big Data. We talked about “massive
databases” or “huge data problems” or something like that. And even if we had
used the term Big Data, it would’ve referred to something much different from
what we mean by that term today. The data then was different both in body and
form. First, there just wasn’t as much data available. We didn’t record what
came into a call center, and business wasn’t done by email; it was done by
phone and letter, and we didn’t have any way of translating it.
Big Data is just
what it implies—a lot of data. Typically big data also indicates that the data
may be both structured and unstructured and come from a multitude of sources.
The growth and diversity of data in this country has increased in all
dimensions due to the internet and the millions of devices around the world
that collect data of all kinds. Big Data is useless without the ability
to organize and glean information from it. In the past, we relied on
traditional relational database architecture, which has turned out to be quite
inadequate in the world of Big Data.
A multitude of new
tools and capabilities are being developed by vendors around the world to
effectively extract true information from Big Data assets. Some of these new
companies, like Splunk, are very successful with their efforts. It concerns me
personally that the quantity of data collection about our daily lives is
increasing exponentially. With all this data collection going on, the
opportunity for misuse is ever present.
Thanks partly to
Edward Snowden and the NSA’s excesses, today’s ubiquitous Big Data is a concept
that many people respond to with suspicion or outrage. It’s absolutely true that some holders of
information misuse it – I’ve met some of those people over the years – and
others don’t give a damn about your privacy – I’ve run across those types, too. But in telling my story, what I hope to show
you is that data itself, as well as data gathering, is neither good nor bad;
it’s how it’s used that matters.
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Brian Feinblum’s views, opinions, and ideas expressed in this blog
are his alone and not that of his employer. You can follow him on Twitter
@theprexpert and email him at brianfeinblum@gmail.com. He feels more
important when discussed in the third-person. This is copyrighted by
BookMarketingBuzzBlog © 2015
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