Created and presented by Bruce Wilson
See photo credits below
If you work for an organization that uses data—and just about all of them do, or will before long—even if your job isn’t specifically about data, your ability to make decisions using data, and decision about data, is becoming more and more important.
Organizations are discovering they need to decide things like
- which problems to solve with data,
- who to hire to solve those problems,
- what kind of training to provide employees,
- what the long term strategy will be,
- and how it is going to explain its data use to the world.
An important subset of these decisions that involves everyone—decisionmakers, employees, and customers alike—falls under the general category of digital ethics, which can encompass how data is collected, stored, used, and shared.
To illustrate, lets look at two examples of digital ethics in action, one surprisingly successful, and one disastrous.
First, the happy story. My friend Aaron Reich is basically the futurist in residence at Avanade, the global technology consulting firm. From the vantage point of his high level insight into many of their consulting projects, last year he called out a few examples where companies achieved remarkable improvement in ways that they can help their customers using data and artificial intelligence. One of these companies is a financial institution in Europe which used AI to predict which customers were likely to “churn”, or leave for a competitor. This was a huge problem for them, and obviously for their customers. By applying machine learning to their customer data, they were able to better understand their customers’ needs, improve their communication, and cut churn in half. This is obviously a win-win for both the company and its customers.
Next, the scary story: in 2015 it became widely known that Volkswagen had “cooked” the emissions test data from millions of its diesel vehicles in order to sell more cars.
- Five days after the story broke, their CEO resigned, and was indicted by the US (but not arrested because there’s no extradition treaty between Gernany and US). His immediate successor was quickly replaced.
- The CEO of Audi, a division of VW, was eventually arrested for fraud and falsification of documents.
- Relatively few VW personnel who had significant roles in the scheme were also present in the US—and thus subject to US jursidiction. One was an engineer sentenced to 40 months in prison…even though he was just doing what his bosses wanted him to do (which is of course not a defense under the law). Another was an engineering manager who was arrested when he entered the US to vacation in Florida.
- VW set aside $31.7 billion for fines, settlements, recalls and buybacks.
- VW experienced a $66 billion drop in value on the stock market after the fraud was revealed (and continued to underperform the market average for some time)
- VW sales fell in the US.
- A shareholder lawsuit was filed in Germany seeking $10.4 billion in damages for corporate stock manipulation (failing to promptly disclose its inability to comply with emissions requirements).
- Germany’s national reputation for manufacturing excellence was damaged—as offices of other German car makers were also raided by investigators searching for evidence of possible cheating.
- An engineering company which assisted VW in defeating emissions testing was fined $35 million—this amount was imposed because it was deemed the maximum the contractor could pay without putting it out of business.
- Even though Germany didn’t used to have a provision for what the US calls “class action” lawsuits, in response to “dieselgate” German lawmakers created a new form of collective legal action that, in November and December 2018 enabled 372,000 German owners of VW cars to seek compensation for being the victims of this fraud.
What’s the point? Why should ordinary business, government organizations, and non-profits take notice of digital ethics? Most people are unlikely to find themselves in the shoes of the people who successfully reduced churn at the European financial institution, or those who participated in Dieselgate. But many will. And we should all be prepared to find ourselves somewhere on that spectrum. We are increasingly like to discover potential benefits from, and problems with, the ways our organizations use data. We can recommend, and sometimes resist, changes our organizations make. The key is to become more educated, and more fluent, in data and digital ethics. It’s like a muscle—you already have it, but you have to exercise it and train it.
In this series of posts about digital ethics, we’re going to cover issues like:
- What does “ethics” mean—and when is ethics important? Ethics are not clearly defined for many situation, and individual’s views of what is ethical can depend largely on context, (for example, healthcare, politics, or finance), and on individual backgrounds or professions.
- What are potential business gains, and avoidable negative consequences, that can result when organizations develop and apply standards of digital ethics internally?
- Who is responsible for digital ethics? Once again, there is no universal answer to this question, but it’s something that every organization and every individual must be prepared to answer for themselves.
- Who needs to talk to who about digital ethics? And here the answer touches on customer relationships, shareholders, employees, leaders, government, and more.
Please join me as we explore this topic and help make it relevant to everyone—this is definitely not best left exclusively to professors, lawyers, and spin doctors.
Photos used in the video:
Blind Men Appraising an Elephant by Ohara Donshu (Brooklyn Museum / Wikipedia)
AI/ML success story
Uncovering the ROI in AI by Aaron Reich (Avanade.com)
VW engineer sentenced to 40 months in prison for role in emissions cheating by Megan Geuss (ArsTechnica)
$10.4-billion lawsuit over diesel emissions scandal opens against Volkswagen (Bloomberg / LA Times)
How VW Paid $25 Billion for ‘Dieselgate’ — and Got Off Easy (Fortune / Pro Publica)
VW Dieselgate scandal ensnares German supplier, to pay $35M fine by Nora Naughton
(The Detroit News)
Car sales suffer second year of gloom by Alan Tovey & Sophie Christie (Telegraph UK)