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How to leak a secret

The following article by Liisa Atva  published in the Huffington Post. It features research by myself and Beedie School of Business faculty Jan Kietzmann and David Hannah.

After watching a James Bond movie with my then nine-year-old, I mentioned that I'd once applied to be a spy. His eyes widened. "You mean you were almost a spy?" he asked. "Well, if I was, I couldn't tell you," I teased. "Maybe when I say I'm going to Toronto for business, I'm really on a secret mission." I wondered how long it would take before one of the other parents from his school sidled up to me and whispered, "Who did you say you worked for?"
I had engaged in what David Hannah, Ian McCarthy and Jan Kietzmann of Simon Fraser University's Beedie School of Business describe in their research as dissembling, openly disclosing a concocted leak. In their recent article, "We're leaking, and everything's fine: How and why companies deliberately leak secrets," they propose that doing so may be beneficial to companies and provide a framework to help managers decide whether "to leak or not to leak."
Hannah et al. classify deliberate leaks into four types: informing, dissembling, misdirecting and provoking. Informing is when a company leaks information and is open about doing so, often as a marketing strategy.

"They can get customers excited about upcoming product offerings, such as the new Star Wars movie. In other cases, they may keep consumers from buying competing products in anticipation of leaked release dates or feature sets."

A promotional trailer of the Star Wars movie The Force Awakens, which included glimpses of the Millennium Falcon spaceship, generated over 55 million views in the first two months following its release on YouTube.

Dissembling, the second type of leak, includes misleading the public about the secrecy of information. An example used is the Caramilk chocolate bar manufactured by Cadbury and sold in Canada. For over 40 years the company's advertising campaign focused on "one of life's sweet mysteries," a tongue-in-cheek, concocted secret about how they get the caramel inside the Caramilk bars. The campaign was so successful that it remains an entrenched part of Canadian pop culture.

Another example used to illustrate dissembling fed my fascination with espionage.

"The truthfulness of a leak can also be linked to the desire to trick and catch people and organizations who themselves are doing unwanted leaking. For example, after a series of leaks at Tesla Motors in 2008, CEO Elon Musk reportedly sent employees slightly different versions of a sensitive email to see which version would be leaked, and thus reveal the leaker."

Provoking, the fourth type of leak, involves companies leaking truthful information in the hopes of obtaining useful information. In "How Apple Does Controlled Leaks" John Martellaro suggests that before launching the iPad, Apple may have released tablet information early for several reasons including wanting to gauge reaction to a US$1,000 price point; to panic or confuse competitors; or to whet analyst expectations. Hannah et al. caution that provoking could backfire if affected parties act on information they assume to be final but that subsequently turns out not to be, negatively affecting a company's reputation.

Although there may be risks for companies in leaking secrets, the researchers make a strong case for doing so when appropriate.

"It appears that some of the most prolific and careful leakers are also among the most profitable companies in the world."

As for the status of my application to the Canadian Security Intelligence Service, I'm still waiting for a response -- 25 years, now.

This posting is based on research in the following article:

Hannah, D. R., McCarthy, I. P., & Kietzmann, J. 2015. We’re leaking, and everything's fine: How and why companies deliberately leak secrets. Business Horizons. 58 (6), 659-667

Consumer Generated Intellectual Property (CGIP) and Emotional Property

Emotional property is "the emotional investment in an act of creation, and the attachment to the creation itself, such that the creator feels ownership of the creation" (Berthon et al 2015: 46).

In this posting I explain why and how companies need to manage the intellectual property and the emotional property generated by creative consumers.

Traditionally, firms have produced goods and services, and consumers have consumed or used them. However, consumers are not only using and consuming, but also increasingly creating products, services and related intellectual property and adapting and modifying the proprietary offerings of companies. Consider for example the legendary hacker George Hotz, who unlocked the original iPhone and hacked Sony’s PlayStation 3. He gave these innovations away free to the public. Consumers also create and publish a vast amount of informational content. Consider all the images uploaded to Facebook, the book reviews posted on Amazon and the videos on YouTube: all of this is consumer generated content ends up belonging to the companies. Regardless of whether consumers are changing physical products or generating information content, these creative acts produce “consumer-generated intellectual property” (CGIP)—intellectual property produced by consumers rather than only by companies.

CGIP has components that appeal to companies and consumers, but are also a source of potential conflict. From the perspective of the company, the focus is on controlling the CGIP and appropriating value from it. While on the consumer’s side it is about the credit and emotion associated with creativity. These differences highlight that CGIP involves not just intellectual property, but also emotional property.

As intellectual property is the legal rights to creations of the mind, emotional property is the emotional investment in or attachment to creations of the heart and mind. More specifically we define emotional property as the product of the affection, fervor and energy that consumers devote to the creative act, and the attachment and pride they have with their creation.

Emotional property is an important but overlooked feature of innovation management. As it governs how consumers react to companies seeking to exploit their creations and CGIP, we present a framework of eight strategies, the 8 Cs (cultivate, coordinate, cooperate, capture, code condemn, crush and copy Cs) to help managers deal with CGIP. The 8 Cs are based on whether companies are positively or negatively disposed to CGIP, and whether the strategic action is directed primarily at the consumer or at the company. Figure 1 shows how the eight strategies (or 8 Cs) for CGIP vary in terms of these two dimensions.

Figure 1: CGIP Strategies
Figure 2: The Emotional Property-Intellectual Property (EPIP) Matrix

The Emotional Property-Intellectual Property (EPIP) matrix (Figure 2) plots the 8 Cs and shows why companies would adopt a certain strategy. This on the extent to which the company perceives the consumer to have either high or low emotional property vested in the innovation, and the extent to which the firm has the potential to control the intellectual property.

The 8 Cs available to companies all fit neatly into the EPIP matrix, but we illustrate just two of the Cs here. Where the firm’s potential control of- and the consumer’s emotional attachment to the IP are both low, the firm can either “condone” or “condemn” an infringement. A nice example of the condone strategy is Sony’s decision to ignore a breach of its copyright in the case of the now famous JK Wedding Dance video. Jill and Kevin used a song by Sony artist Chris Brown as background music to the entrance of the bridal party and put the video on YouTube where it got millions of hits. Sony’s decision was driven not only by the fact that the video was just good harmless fun, but also because the artist had recently gotten really bad press and was in bad need of an image resuscitation. Where both the firm’s potential control of- and the consumer’s emotional attachment to the IP are high, a firm can implement a cooperate strategy. The website Quirky invites consumers to submit new product ideas to its site for consideration. If an idea is favorably received it is then developed into a prototype and in many cases eventually turned into a commercial product. In exchange for Quirky funding this development process, the inventor assigns all IP to Quirky. Quirky gains and controls the IP, but the consumer also gets credit and remuneration, which compensates their high emotional stake.

This posting is based on research in the following article:

How To Gamify Your Business

The following article is by Liisa Atva and was published in the Huffington Post on the 7th April 2016. It features research by myself and Beedie School of Business colleagues Jan Kietzmann, Leyland Pitt, and Karen Robson, and Kirk Plangger at Kings College University.

I like reality TV, especially American Idol. I've heard the negative comments: "Reality TV rots people's brains" and "For many, reality television is the lowest form of entertainment, an insult to our collective intelligence." I don't agree. Not only do I enjoying watching contestants "sing for their lives," I'm learning business strategies while doing so.

Business strategy from a singing show? Despite its cancellation, there's no denying that American Idol has been a success: a 13-year run; 30 million viewers an episode at its peak; and its performance or results show the top ranking TV show in U.S. television for eight consecutive years.

According to media analyst Anthony DiClemente, American Idol, one of the most profitable shows in U.S. TV, was transformative for Fox Broadcasting, turning it into the leading TV network in the U.S.

What organization, in any industry, wouldn't want that kind of success? Perhaps by studying what American Idol did and applying similar techniques with its own customers or employees they can. The producers of American Idol took a talent search and turned it into a game for the contestants and, more importantly, transformed passive TV viewers into highly engaged ones with an active role to play.

Businesses have successfully used game-like experiences such as frequent flyer programs, reward cards and sales competitions to increase loyalty and engagement for some time. However, "gamification," the term for this process, did not emerge until around 2010. To clarify, gamification is not about creating games, but learning why games are so engaging and applying the psychology and behavior behind that to business processes - gamifying non-gaming situations.

American Idol, which began in 2002, was a successful pioneer of gamification long before the term was even coined. As a nationally broadcast TV show it had a platform with the potential to attract a wide following. Gamification has, however, become scalable for many other types of businesses.

The rise in gamification, according to Dr. Ian McCarthy, Associate Dean with Simon Fraser University's Beedie School of Business, can be attributed to several developments. First, the growth of the computer game industry has contributed to a better understanding of what motivates individuals to play and makes games successful. Secondly, the pervasiveness of social media, and web-based and mobile technologies has expanded the ways in which individuals and organizations can participate in an experience.

Gamification is successful when customers or employees continue to play and, as a result, the organization achieves its desired goal. Why is it successful for some organizations and not for others? A question a team of researchers from the Beedie School of Business that, in addition to McCarthy, includes faculty Jan Kietzmann, Leyland Pitt, and PhD students Karen Robson and Kirk Plangger is working to address. Borrowing from the work of game designers and researchers into what makes computer games engaging, the team developed a conceptual framework of the gamification process. They identified three principles that they tagged with the acronym MDE: the mechanics, the dynamics, and the emotions (see Figure 1).

Figure 1: MDE Gamification Framework (Robson et al 2015)

Gamification mechanics include the rules, the setting, the goals, and how players "win" or progress through the experience. The rules with respect to American Idol include how viewers can vote - via voice calls, SMS tests, or online; when they can vote - at the start of the show until two hours afterwards; and how often - as many times as they can within the two-hour voting window.

Dynamics are the player behaviors that emerge during the game, such as competing, cheating, bluffing, or bragging. Managers need to monitor the gamified experience to ensure that players remain engaged and are not breaking the rules - gaming the game. If the game is not perceived as fair this could put off other players and they may not continue to play. For example, with respect to American Idol, the producers reserved the right to remove "power dialers" that could unfairly influence the voting results.

If the mechanics and dynamics work player's emotions are triggered. Positive emotions, such as excitement, goal attainment, and extrinsic reinforcements such as money and status are powerful drivers of behavior. Negative emotions such as disappointment, and avoidance of such, can also be motivating. For gamification to succeed designers need to understand how to tap into these emotions. American Idol leveraged viewer's desires to see their favorites succeed resulting in emotions of happiness, relief or disappointment.

"If you get the MDE right then you get powerful games where people are motivated to spend lots of time and money engaging," said McCarthy.

Gamified experiences are rarely static and players may start to lose interest - I switched to The Voice a few seasons ago. Managers need to recognize when changes are needed to keep customers or employees engaged and excited. Over the years American Idol adapted to the challenge by adding new features; online voting, the fan save, songs selected by viewers, and hometown visits. Even despite manager's best efforts a game may lose it's usefulness or appeal. If you want to attract customers to a new game in the future you need to know when to pull the plug on the old one. Although American Idol's last show will air this week, it leaves behind a contribution to understanding the gamification of business processes.

To learn more, check out the following articles:

Robson, K., Plangger, K., Kietzmann, J.H., McCarthy I.P, and Pitt L.F. 2016. Game on: Engaging customers and employees through gamification. Business Horizons. 59 (1), 29–36.

Robson, K., Plangger, K., Kietzmann, J.H., McCarthy I.P, and Pitt L.F. 2015. Is it all a game? Understanding the principles of gamification. Business Horizons. 58, 411 - 420

The Encyclopedia of Social Media and Politics: Honeycomb Framework

The following posting is reproduced from the entry by Sónia Pedro Sebastião in the Encyclopedia of Social Media and Politics.

The honeycomb framework is a visual structure composed of several blocks in interdependence proposed by Jan Kietzmann, Kristopher Hermkens, Ian McCarthy, and Bruno Silvestre to help scholars and professionals understand how social media can be used as part of a communication strategy. This model emphasizes the functionality of Web social media, and may serve to understand the better way to include these instruments in a communication strategy showing comprehension with the ways that Web users use social media in their lives. The honeycomb framework presented by these scholars is based on the ideas of several bloggers, namely Stewart Butterfield, Peter Morville, and Gene Smith, who developed and combined ideas discussed by Matt Webb.

In nature, honeycomb cells in beehives are an example of geometric efficiency because the shape of the cells allows two opposing honeycomb layers to nest into each other, with each facet of the closed ends being shared by opposing cells. Applying this metaphor to Web social media and considering seven main attributes, Kietzmann,Hermkens, McCarthy, and Silvestre have defined functional blocks in interdependence. These blocks are:

·       Identity: Related to the information provided to identify users, and that reveals themselves or a constructed self. This self-disclosure may include data about sex, age, occupation, or preferences on a real or deceptive basis (to assure anonymity).

·       Conversations: Concerning the channels used to promote dialogue between users, that is, with means that allow talking in real or deferred time.

·       Sharing: Linked to the exchange, distribution, and reception of meaningful content by participants. Sharing may lead users to start conversations and establish relationships, depending on the functionality of the social media platform.

·       Presence: Related to ways of knowing who is available in the social media platform.

·       Relationships: Concerned with the information provided about the bonds that individuals form with each other (e.g., family and friends), through which they feel connected and exchange meaning.

·       Reputation: Related to the appreciation and trust of users to the social standing of participants and content, usually expressed in opinions.

·       Groups: Linked to the possibility that digital channels have to provide the creation of communities of users with common interests.

These functional building blocks are neither mutually exclusive nor present in all social media activity because they are constructs that show how different levels of social media functionality can be configured. The authors' proposition is motivated by the need to comprehend how citizens are consuming the Web and how its use is maturing, evolving, and changing through time thanks to the new communication landscape and broadening exposure to it.

Presently, a multiplicity of social media that differs in terms of scope and functionality may be found: Some are more massive, while others are more focused on a target, function, or purpose. This diversity may lead to reluctance or the inability to use social media in a strategic communication campaign and promote an effective engagement between the political actor and users (citizens or constituents). The honeycomb framework allows a systematic view of social media and illustrates the more suitable platforms according to the objectives of a communication campaign. It is a tool that serves several purposes; for example, it helps to define priorities, supports a modular approach to social media, and can serve as a looking glass, transforming how people see things and enabling new explorations.

The functionality of social media tools focuses on a combination of these blocks. For example, Facebook favors relationships, identity, and reputation, whereaschannels of video sharing (like YouTube or Vimeo) promote sharing and groupformation. Knowing the tools, their functionalities, reputations, and presence of the same users, organizations can define their communication strategies, which will depend on the market context.

We’re leaking, and everything’s fine: How and why companies deliberately leak secrets

“The evidence suggests that firms that leak secrets may be doing very well; it appears that some of the most prolific and careful leakers are also among the most profitable companies in the world” (Hannah et al. 2015)

A secret is something that is kept or meant to be kept unknown or unseen by others. We all have secrets and we have many different reasons for keeping them, but ultimately we do not want to face the consequences of having them exposed.

It’s not just individuals who have secrets. Companies also have and hold on to secrets. Competitors often seek to acquire secret information on recipes, formulas, production processes, pricing and marketing plans and anything else that provides a competitive advantage.

Why then would companies deliberately leak secrets? This question is the subject of a new paper, I have published in Business Horizons with Beedie School of Business colleagues Dave Hannah and Jan Kietzmann. Using reported examples of deliberate leaks from companies such as Apple, Enron, Toyota and Cadbury, we explore how and why companies deliberately leak their secrets. Our answer is it depends! Ultimately, a firm’s choice regarding whether or not to leak secrets involves weighing the risks of a leak against the potential returns.

To clarify the risks and returns of leaking we produce a classification (Figure 1) of four kinds of deliberate leaks (Dissembling, Misdirecting, Informing, and Provoking), based on the following two dimensions of leaks:

  1. the truthfulness of the information in the leak i.e., does the secret contain factual or concocted information
  2. the signaled intentionality of the leak i.e., is it an overt leak where the company admits it leaked the secret, or is it a covert leak where the company falsely claims the leak was a mistake or pretends not to know it has occurred.

Figure 1. A classification of deliberate leaks

Each type of leak is suited to different circumstances and brings both benefits and consequences. Our paper offers examples for each type and a decision making framework (Figure 2) to help managers determine when, whether or even how they should set about deliberately leaking information. 

Figure 2. A decision framework for why and how organizations should deliberately leak secrets

Although the framework does not eliminate the consequences of secrets leaking out, knowing what to expect can be helpful for companies. As we explain in the paper, our typology and framework offer managers a way to arrive at more informed decisions about whether or not to leak secrets. It also provides scholars with a descriptive and predictive basis to study the important organizational function of “having a leak”.

This posting is based on the research in the following article:

User innovation and 'emotional property' - How firms can appropriate consumer-generated intellectual property

The following posting was published by the Beedie School of BusinessIt features research by Beedie School of Business faculty Ian McCarthy, Jan Kietzmann and Leyland Pitt, and Pierre Berthon at Bentley University.
New research from Simon Fraser University’s Beedie School of Business reveals that though firms may be tempted to profit from consumer-created modifications to their intellectual property, this is not always advisable – and can in fact backfire.
The paper, CGIP: Managing Consumer-Generated Intellectual Property was co-authored by Beedie researchers Jan H. Kietzmann, Ian McCarthy, and Leyland Pitt, along with Pierre Berthon of Bentley University.
It was published in the Summer 2015 issue of California Management Review 
The study examines the phenomenon of “consumer-generated intellectual property” (CGIP), where consumers rather than firms innovate, modify, hack, or in some way alter an organization’s proprietary products or services.
The research addresses how firms should deal with this intellectual property their consumers create, and the dilemmas this presents for managers.
It argues that consumers’ intellectual property should not be leveraged at the expense of what the researchers call emotional property, defined as: “the emotional investment in or attachment to creations of the heart and mind.”
The study cites several real world examples, including that of Hollywood actor Vin Diesel, who was the first Facebook user to reach the million followers milestone.
It notes that this achievement undoubtedly contributed to the network’s growth, but that Diesel did not receive any compensation for doing so.
Instead, Facebook contacted him to remind him that all the content he had posted now belonged to them, as per their terms, and to inquire how he had achieved his success.
“Much of the value and intellectual property nowadays lies in information generated by customers, consumers, and users, rather than by firms themselves,” says Pitt.
“While a company can capture CGIP, it cannot appropriate or negate the emotional investment that consumers have in their creations.”
In choosing to appropriate CGIP, firms run the risk of financial loss or incurring damage to their reputation if not handled correctly.
In order to help firms manage this CGIP, the research integrates the different perspectives firms can hold into a diagnostic framework consisting of eight strategies.
The framework further categorizes the strategies within each stance ranging according to whether it is positive – cultivate, coordinate, cooperate, or capture – or negative – condone, condemn, crush, or copy.

Berthon, Pierre , Leyland F. Pitt, Jan Kietzmann, and Ian P. McCarthy (2015). CGIP: Managing Consumer Generated Intellectual Property, California Management Review. 57/4: 43-62