Tuesday, March 31, 2015

Supreme Court on Facts and Opinions

A new Supreme Court ruling covers what companies can say, in particular about their own status and prospects, when they are selling stock to the public. This is important because if they mislead potential investors, lots of money can be made or lost. The case is Omnicare v. Laborers District Council Construction Industry Pension Fund.

In this case, the issue revolved around opinions versus facts and errors of commission versus errors of omission.  And what the Justices decided is that companies can say any opinion they have.  But they are not allowed to omit and relevant factual information that might go with it.  So for example, they can say that they “believe their new product will dominate the market” as long as there is no evidence (beyond reasonable doubt) that they don’t really believe this. And according to the reports I have read, it is virtually impossible to prove that someone did not believe a subjective opinion like this. 

BUT, here is the key.  If there is evidence to the contrary, such as an internal market research study, they are not permitted to keep this quiet.  So what they would have to say is that they “believe their new product will dominate the market, although our market research has some data suggesting otherwise.”  Or “we believe that we will will the lawsuit against us, despite the fact that our attorneys are not so sure.”  Or whatever.

Lawsuits will still be common because there can be disputes about whether a fact is relevant enough to be required or how companies link the two together.  For example if a third party market research study, funded by an independent organization, says their product may not be dominant, do they have to include that?  And what if they “include” it by using a very small superscript with a footnote that references the study but not linked in any way? 

There might be more complete details about these latter nuances in the full opinions (there were two – seven Justices gave the main ruling and two combined on a concurring opinion).  But it is the main distinction that I thought was interesting.
·         You can provide facts, but you can’t omit them or lie about them.  And you don’t have to give your subjective opinions about them.
·         You can give your subjective opinion almost without scrutiny, but only if you also give relevant facts.

This is new law.  Before, there was no legal requirement to include any relevant facts as long as you were presenting an opinion.  The only problem was if your opinion turned out to be wrong – and then you could be sued.  Now, you can be sued for the omission, but not for the future counterevidence.  This makes sense because companies should not be presenting opinions where they have related counterevidence without at least warning investors about it. But they also shouldn’t be held liable if they have an opinion and where they have no related counterevidence at the moment, even if some later emerges.

Friday, March 27, 2015

This Week in EID - Episode 47

So it looks like the semi-structured model for scheduling the EID articles is working out really well.   

Monday’s article was not officially based on a company from FC’s Most Innovative list, but it was perhaps more important because it looked at emerging technologies that could be critical for our future – and how we need to manage the risk involved since there could be all kinds of unforeseen consequences.  Next week, I think we are back to an FC company.

Tuesday’s article on transfer of training from driving games or driving simulators to real driving skill received more comments than I think any post in our history.  There was a Linked In group that debated the fidelity issue back and forth.  I was happy to insert some actual science into the debate – taskflow fidelity leads to transfer of skill and sensory experience fidelity leads to user engagement.  So pick your poison.

Wednesday’s piece on social pressure as a stronger motivator than money also got a strong debate going on Linked In.  Not only did I have some science to support this one, but this topic is a full chapter in my new book (which should be out this summer). 

Then Thursday we closed with a very thought provoking article on Noah Webster and the founding of our country.  If you think that is deep, just wait until next Thursday !!

Wednesday, March 25, 2015

Behaviorally Smart Notifications

This is a great example of applying behavioral design to smart notification - a fitness app that looks ahead in your schedule, finds a good time to exercise, and notifies you with enough advance warning that you can use your long term thinking (which is less susceptible to excuse-making).

The notification can even be customized with your own message to yourself - with details of how and why to do it: "put your running shoes and gym clothes in the car - you have nothing scheduled at work today from 12 to 2pm. You want to live long enough to see your grand kids get married, don't you?" Or whatever message will specifically resonate with you.

Monday, March 23, 2015

Book Review Conflict

I recently offered to review a book for a popular web site that specializes in User Experience. I know that the book is one that few people who use the site will already have read and would probably not ever read based on the title or the subject. But in my polymath way, I know that the contents of the book could be very valuable to them and I hope I can translate it so that the value to their specific lives is clear. 

But that is not what a book review are supposed to do. The EID site or this blog is where I should do stuff like that. A book review is supposed to talk about whether the book has quality content, is well written, well organized, well sourced, and that kind of thing. Not promote the value of its content.

This brings up challenge number two. I am a dedicated fanboy of the book’s author. I read his blog, subscribe to his podcast, and now read his books (his second one comes out in the next few months and I plan to get that one as well). Can I keep an open mind when reading and reviewing the book?  Or will natural human biases hijack my opinion and insert my expectations and preferences into my review? 

I have written dozens of technical book reviews and read hundreds. But I have never had this much potential for bias and internal conflict. I guess I will have to read the book, write the review, and let you know.

Friday, March 20, 2015

Starbucks Epic Fail with #RaceTogether

I am sure most of you have heard about Starbucks’ social responsibility marketing campaign called “Race Together.”  If you haven’t, they are encouraging baristas to write (randomly) on some customers’ cups the hashtag #Racetogether.  Starbucks CEO Howard Schultz’s grand idea was that we need to have more conversations about race, demonstrated by Ferguson, Staten Island, Cleveland, etc.  He thought this might get customers asking the barista what the bleep it meant and that could start a conversation about race.  40% of Starbuck’s baristas are minorities. 

With all due respect to a good intention, if I wanted to have a conversation about race, the last person I would choose is my barista.  Random people using a Twitter hashtag they found at Starbucks is not far from the bottom either.  Perhaps they could encourage you to talk about race with whoever you came to Starbucks with, except for the fact that Starbucks seems to be filled with people who came to camp out alone at a table and work.  Or takeout. 

So good for Howard Schultz in trying to get us talking about race.  But as for the marketing team that came up with the implementation . . . . .  You really suck.