Loughborough University School of Business and Economics Bi-Annual Magazine by Loughborough University

INSPIRE LOUGHBOROUGH UNIVERSITY SCHOOL OF BUSINESS AND ECONOMICS BI-ANNUAL MAGAZINE ISSUE 15

NEW MODELS OF BUSINESS

AI Sales Robotics Social Entrepreneurship Big Data New Economies Social Media IT

Editor: Ondine Barry

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WELCOME This issue focuses on new models of business, with articles on the changing nature of sales teams, automation at work and robotics, how to invest in IT to promote innovation, social entrepreneurship and much more. In addition, we have two pieces on the Cambridge Analytica scandal that look at the ethics of data collection and use and at how organisations can manage customer data responsibly. The university sector in the UK is currently working through a challenging period; perhaps every period is challenging, it is just that the challenges change over time. Brexit remains a concern as the form and consequences of the UK’s exit from the EU continue to be uncertain. But the present issues are fiscal in nature and focused more on issues within our borders.

at managers with three years’ experience or more, will be delivered on a bespoke basis to full cohorts from one organisation and as an open programme with individuals or small groups from different organisations. It is an excellent opportunity to develop management and leadership skills at minimal cost by calling on the Apprenticeship Levy funding that is available to many organisations.

Earlier this year, the UK government announced that the cap on undergraduate fees will be held at £9,250, instead of previous plans to allow an increase of £250. As a result, a significant element of our income stream is flatlined, while costs continue to rise.

We are also launching a new Executive MBA this autumn. This is an exciting revamp of our long-established and successful part-time MBA. The new programme will be taught on a block basis, with some online delivery, opening up opportunities for flexible study for participants from across the UK and beyond.

We also live in a period of uncertainty as the government has set-up a review of university funding. Alongside this, a temporary dip in the demographic of 18 year olds and on-going debate about the future of the universities’ pension scheme also have potential fiscal impacts. Thankfully, as a high-ranking University and School in a strong financial position, we are well set to manage these challenges. What it does emphasise is the growing need to diversify and specifically internationalise the activities and focus of the School, thereby reducing our dependence on any one demographic. In the last edition, I mentioned that we were aiming to introduce a new Masters-level Degree Apprenticeship programme. The MSc in Strategic Leadership is now launched, with the first cohorts due to start in the autumn. This part-time programme, aimed

Participants will also be able to use the Apprenticeship Levy to help fund their place on the Executive MBA. For more details on both the Executive MBA and MSc in Strategic Leadership programmes, see our website or contact our Business Development Manager, Vicki Unwin (v.e.unwin@lboro.ac.uk). I hope you enjoy this issue of Inspire.

Sincerely yours,

Stewart Robinson Dean, School of Business and Economics, Loughborough University

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NEWS

School awarded full EQUIS accreditation The leading international system of quality assessment, improvement and accreditation of higher education institutions in management and business administration, EQUIS (European Quality Improvement System), is managed and run by the European Foundation for Management Development (EFMD) with the fundamental objective to raise the standard of management education worldwide.

Decision Sciences ‘Ambition’ launched Decision Sciences is a University ‘Ambition’ led by the School of Business and Economics – one of four Ambitions that Loughborough is currently championing. Decision Sciences is a step beyond data analytics and highlights how organisations and individuals use data to inform decisions, as well as how data-driven decision making can support business functions such as marketing and HR. Academic staff from across School work on themes in Decision Sciences, ranging from information management through efficiency and productivity analysis to operational research and business analytics. On June 12th the School held a three-part Decision Sciences event, starting with the launch of the Ambition, then a workshop illustrating the different ways organisations can engage with the School on DS research, and finally a talk by Professor Paul Fishwick, pictured below (Distinguished University Chair of Arts and Technology and Professor of Computer Science at University of Texas, Dallas) on the art and science of modelling.

Just before the end of December, the School was notified by the EFMD that it had been awarded the full five years accreditation. EQUIS accreditation puts the School of Business and Economics amongst the 1% of business schools in the world with triple accreditation (EQUIS, AACSB and AMBA), further confirming the School’s commitment to the highest level of management research and education across all degrees from BSc to PhD. Professor Stewart Robinson, Dean of Business and Economics at Loughborough University, said:

“To have our efforts reaffirmed in such a way is extremely pleasing and confirms how strong our School is now that EQUIS accreditation is recognised all over the world by students, academia and business as a significant indicator of business school quality.” In addition to EQUIS, AACSB and AMBA accreditations, the School is a proud signatory of the Principles for Responsible Management Education (PRME) and also holds a Small Business Charter award for its activities in entrepreneurship and SME engagement.

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Graduation news The 2017 Winter Graduation drinks reception was held in December at the SBE. With family, friends and staff together to celebrate their achievements, new graduates were welcomed into the Loughborough alumni family. On Tuesday, July 18th the 2018 Summer Graduation drinks reception for SBE graduates will be held from 12:30 to 14:30 in the Netball Centre on campus. If you are graduating this summer and have booked your place at the drinks reception, we look forward to seeing you there!

Water sector workshop draws industry leaders On May 23rd, the School’s Centre for Productivity and Performance hosted a workshop on the water industry, focussing on issues of performance, ownership and cost assessment.

With the Water Services Regulation Authority for England and Wales, or Ofwat, finalising its 2019 Price Review, these issues have been highlighted with increasing frequency in the media.

will directly impact the prices paid by consumers for water and sewage services in England and Wales from April 2020. Both research studies were key features of the workshop.

Water industry expert Professor David Saal, Co-Director of the Centre for Productivity and Performance (CPP) at the School, organised the workshop with senior representatives from Ofwat, the Water Industry Commission for Scotland, Anglian Water and Severn Trent Water presenting, as well as top academic and consultancy experts.

The workshop was divided into three sessions:

Professor Saal recently finalised a report with Frontier Economics commissioned by Water UK on productivity trends in the English water and sewage industry since privatisation. This report, alongside research for Anglian Water on its regulatory cost assessment modelling,

A morning panel discussion on ‘Water Industry Performance – Lessons from Different Countries and Ownership/ Regulatory Models’ chaired by Professor David Parker. An afternoon panel discussion on ‘Water Industry Cost Assessment for 2019 – Academic, Industry and Regulatory Perspectives’ chaired by Professor Monica Giulietti.

Professor Saal said:

“It gives me great pleasure to be able to organise such a prestigious event on issues that will affect not just water companies but also UK households. Given the current Ofwat consultation on cost assessment, the workshop was well placed to provide important insights into the process and influence the outcome of Ofwat’s final price determination in December 2019.” Save the Date! Loughborough University will be hosting the XVI European Workshop on Efficiency and Productivity Analysis (EWEPA) 10-13 June 2019.

A roundtable on ‘The Implications and Outcomes for PR 2019 and Beyond’. 05

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NEWS

MBA student named Placement Student of the Year Tina Sadikin, a Loughborough MBA student, has won Placement Student of the Year at the Loughborough Students’ Placement Awards 2018, held on the 14th of June.

Celebrating sporting success The School is celebrating sporting success by the Leicester Riders, who achieved their third straight British Basketball League (BBL) trophy title earlier this spring. Not only does the School co-sponsor the Riders team, but recent MSc graduate Tyler Bernardini captained the side, playing alongside MSc Marketing student Keifer Douse and MSc International Management student Eric Robertson. The Riders are the first BBL team to win three consecutive trophy titles since 2004. Eric and Kiefer, both students on SBE Masters programmes, also play for Loughborough Student Riders in BUCS, and were crowned 2018 BUCS Champions in March this year. In a trilogy of success, the Loughborough Student Riders were also recently named NBL Division One League Champions. Professor Jim Saker, who spearheaded the Rider’s sponsorship, commented: “The School of Business and Economics actively supports students who wish to pursue their sports careers while obtaining a top-class education. We have been delighted by the contribution the elite athletes make in class and the enthusiasm that they generate as they work with their fellow students. “In addition to players from the Leicester Riders, we work with the Nottingham Panthers Ice Hockey team and are proud to support Loughborough Lightning netballer Peace Proscovia.”

An annual effort by the Loughborough Enterprise team, the Awards aim to celebrate the outstanding achievements of students and the transformative opportunities that their employers provide. Finalists were selected from the University-wide nominations, split into six categories – Private Sector (over 1,000), Private Sector (up to 1,000), Public Sector, Master or Business Administration (MBA), Postgraduate Certificate in Education (PGCE) and Special Achievement. Three students, Keziah Uimbia, Vicki Nie and Tina Sadikin, from the School of Business and Economics, were shortlisted as finalists for the MBA category, with the award going to Tina Sadikin for her provision of invaluable support across a range of roles including human resource, event management and technical accounting for Bosch Engineering. Congratulations to our finalists and Tina, for winning the award!

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2018 SBE Awards Dinner recap On March 1st 2018 the School held its annual Awards Dinner on campus, celebrating the achievements of its outstanding staff and students. Despite the Beast from the East storming in on the night, the dinner was a great success, with a total of 18 awards handed out: 3 Distinguished Alumni Awards Gay Deuchar, Louise Cooke and Jill Ross. 7 student awards Dominic Cowell, Jessica Verlander, Courtney Stephenson, Ninoska Barzey, Tek Simkhada, Rebecca Griffith and Sathya Mellina. 8 staff awards Ian Hodgkinson, Sharon Bennett, Charlotte Connor, Xiaohui Liu, Boyka Simeonova, Cheryl Travers, Michelle Aitken and Elena Georgiadou.

10 years of industry collaboration with SAP June 2018 marks the tenth year of the School of Business and Economics relationship with SAP University Alliances. SAP is the world leader in enterprise applications and the world’s thirdlargest independent software manufacturer. Led by Dr Crispin Coombs, Reader in Information Systems, the highly successful collaboration has led to many exciting opportunities for undergraduate and postgraduate students, both in the classroom and beyond.

The relationship has also been valuable for research activities with doctoral researchers – working with SAP and their clients to explore how to improve the benefits realised from technology investments. Dr Coombs said:

“We really value our relationship with SAP and the benefits it brings for our students and researchers. It’s invaluable for students to have experience of working with industrystandard technologies, which sets them apart in the ultracompetitive graduate job market.”

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AI, ADVANCED AUTOMATION AND WORK

SHOULD WE BE CONCERNED? The question of how advances in artificial intelligence (AI), automation and robotics technologies will impact on work and society is no stranger to the headlines. In April this year, Tesla, one of the contemporary pioneering users of advanced automation technologies, was in the news for having to halt production in one of its plants.

By Professor Donald Hislop, Dr Crispin Coombs, Dr Sarah Barnard and Dr Stanimira Taneva

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Everyone will of course have watched the videos of the Japanese robot that walked up and down stairs and did somersaults (showcasing some of the more advanced ‘human’ movements which up till now had been too difficult to design).

predicted large-scale job losses, others have challenged this view by suggesting that when a task-based analysis is considered, only 9% of jobs in the OECD economies are potentially fully automatable. Clearly, opinion varies widely on this topic.

And just last month, Forbes ran an article on the inevitability of artificial intelligence in HR and business support systems, in which the author stated: “…for organizations which are able to pull it all together, the rewards are there for the taking”.

The majority of research that considers the work-related outcomes of these technologies has been conducted in the healthcare and transport sectors. Workrelated outcomes of emerging technologies in these sectors suggest that these technologies will complement and extend human capabilities rather than completely eliminate whole jobs.

In 2015, the Bank of England published a report that suggested that over the next 20 years almost half of UK jobs (about 15 million) could be lost to automation and AI technologies. A year later, Steven Hawking said in a speech that AI could either kill or save humankind. As you can see, much of the material that is published on this topic has been speculative, predictions regarding future trends. Therefore, now is a good time to take stock and evaluate the actual impact these technologies have had to date. This was the task set for us by the CIPD (The Chartered Institute of Personnel and Development), which funded a literature review into this topic in late 2016. The purpose of our report was to add evidence to the AI-work debate by conducting a review of the published academic literature on how emerging technologies are shaping the world of work, and the ethical issues related to the contemporary usage of these technologies.

— “For organisations to realise the benefits of these technologies, it is crucial that employers consult and involve their staff.” —

This was done via a rapid evidence review that focussed on the impact of artificial intelligence (including machine learning and cognitive computing), robotics (including service robots, and softwarebased robotic process automation) and automation technologies, with a narrow focus on knowledge and service work and professions. We did not include the manufacturing sector, which has seen its fair share of automation and computerisation, due to the maturity of research in this area. It was anticipated that developments in the computerisation and automation of knowledge and service work represented some of the most significant contemporary technological developments in the work context.

Impact on work One of the most highly debated topics has been on how these technologies may impact on employment. While some have

An example of this is an automated decision support system for air traffic controllers that increases their performance level and the accuracy of their work. In the healthcare sector there has been considerable interest in the use of robot-assisted surgical procedures. Robot-assisted surgery is less invasive, and patient recovery times appear to be shorter. However, fully autonomous robotic surgery tools have not yet been utilised, and robots are used as tools to aid surgeons rather than to replace them. Finally, data mining and analysis has the potential to contribute to the improvement of healthcare planning. For example, the findings of an exploratory study into the application of an electronic health records system that used the health records of 500 patients in a single hospital provided an opportunity to more effectively plan people’s complex healthcare needs, and thus facilitated improvements in organisational decision-making processes made by people at a strategic level. Getting workers involved Workers’ attitudes to and behaviour in relation to emerging technologies is a key mediator of the extent and the manner in which they are used. For example, workers’ trust in the technological systems can impact significantly on the effectiveness of their application. Workers’ relationship with the technologies is likely to evolve over time, thus a full understanding of the factors that influence user trust, and shape how it evolves over time, is important. Further, for organisations to realise the benefits of these technologies, it is crucial that employers consult and involve their staff during the development and implementation of new technologies. Employees should not view this change as something that is ‘done to them’, but rather something that is ‘done with them’.

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Impact on the professions The ongoing and potential impact of these technologies on the work of professionals is potentially profound. Firstly, these technologies have the potential to impact on a wide range of traditional and contemporary professions, including medicine, education, accounting, journalism, information science and air traffic management. In the domain of medicine these technologies are applicable in a wide range of areas, including surgery, mental health provision, care of the elderly, pharmacy pathology and forensics. Empirical evidence from these studies suggests that the most significant way in which the utilisation of these technologies is changing the nature of professional work is, firstly, via the automation/computerisation of routine tasks, and, secondly, through involving a greater interaction with, and utilisation of, robots and AI systems, which increasingly facilitate various aspects of peopleâ&#x20AC;&#x2122;s work activities. The below examples illustrate these issues. One development is a robotic pet (a baby seal called Paro), for use with elderly dementia patients. This robot mimics the behaviour of a real animal and responds when people interact with it (via talk or touch). It is argued to have positive benefits for patient health and wellbeing, helping calm and comfort many patients. It also has significant implications for the work of healthcare professionals through changing the way healthcare is provided, and for the skills and knowledge required of healthcare professionals. In the domain of forensics it has been suggested that AI systems have the potential to change and improve digital/ cyber forensic investigations using digital evidence. For example, it has been argued that the analysis of social media data could be a potentially valuable tool for cyber forensics, or that artificial intelligence systems can help to sort and manage digital evidence. These developments imply that forensic examinations increasingly require the analysis of digital sources, and that forensic professionals will be asked more and more to develop the relevant skills in order to use these technologies, and continue to perform their work effectively.

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gains pace, HR professionals have an important role to play in ensuring that the types of change the implementation of these technologies produce deliver positive outcomes for both organisations and their employees.

Donald Hislop top left, Stanimira Taneva top right, Sarah Barnard bottom left, Crispin Coombs bottom right

To be able to do this effectively, HR professionals need to be informed and knowledgeable on these technological developments and their potential organisational impacts. While much of the media coverage of these issues is pessimistic, emphasising the idea that these technologies may create mass unemployment, our literature reviews show that in the healthcare and transportation sectors, technology is allowing for some degree of role expansion and augmentation of jobs that people are already doing. Therefore the areas of concern suggested by the rhetoric of media coverage are not, so far, borne out in evidence. We suggest that the focus should be ensuring that the design and implementation of new technologies are collaboratively developed based on collective benefits. The challenge for HR professionals is to be a key stakeholder shaping the ways these technologies are implemented in workplaces. One finding from our review that undermines concerns about the impact of innovations in popular discourse is that very little detailed empirical evidence exists in the academic literature on the real-time adoption and use of these technologies by organisations. Perhaps in the absence of empirical evidence, opinion based on anecdote has been allowed to define the debate. We aim to undertake research to address this gap, and we are interested in working with any organisation or person implementing such change, so that we can better understand it and provide insights that may help with such efforts.

Donald Hislop is Professor of Sociology of Contemporary Work and Director of the Centre for Professional Work and Society. Donald can be reached on d.hislop@lboro.ac.uk Crispin Coombs is Reader in Information Systems and Head of the Information Management discipline group. Crispin can be reached on c.r.coombs@lboro.ac.uk Sarah Barnard is Lecturer in Sociology of Contemporary Work and a member of the Centre for Professional Work and Society. Sarah can be reached on s.h.barnard@lboro.ac.uk Stanimira Taneva is Senior Research and Enterprise Associate and a member of the Centre for Professional Work and Society. Stanimira can be reached on s.taneva@lboro.ac.uk

If you would like to read the CIPD report, titled â&#x20AC;&#x153;The impact of emerging technologies on work,â&#x20AC;? it can be found on the CIPD website.

The impact on HR As organisations evolve and the implementation of these technologies 11

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Investing in IT to stimulate innovation

New business models such as Uber, Airbnb, Taobao and Amazon have transformed industries and raised important new questions about technology management. By Professor Christopher Holland Historically, many commentators recognised that information technology (IT) could yield significant competitive advantage, and the enthusiasm of these early commentators was strongly supported by the emergence of global systems in the 1990s, ecommerce in business markets and, of course, the rise of new technology giants in consumer markets such as Google, Amazon, Facebook and Apple. However, there have been some dissenting voices and significant IT project failures. One of the most widely read, and possibly most salient, arguments came from Nicholas G Carr writing in Harvard Business Review in 2003 (in an article titled “It Doesn’t Matter”), who stated that most investments in technology have become routine in nature, ie, the IT being invested in is designed to help businesses manage core business processes more efficiently and is therefore highly unlikely to yield any kind of superior business performance or innovation. Indeed, research into technology cost structures supports the idea that the majority of IT investments can be categorised as infrastructure costs. So how should managers approach technology strategy? Should they be cautious and minimise the risks of implementation, or should they be more creative and open in the way that they evaluate and manage their technology strategies, eg, through innovative and collaborative technology partnerships? 12

New technology and business models For established technologies, the link between strategy and technology is still strong, but IT strategy should be managed carefully to minimise costs and implementation risks. For new technology that could potentially transform business strategy, the focus should be on experimentation and ambitious strategies. In this scenario, IT and business are considered as two sides of the same (business model) coin, whether it is investments that enable business process innovation or developing new business models from scratch. New forms of technology will form a crucial part of the overall logic and operations of innovative business models. New technology includes big data, analytics, 3D printing, blockchain technology, cloud computing and mobile connectivity of physical objects, which leads to the concept of Internet of Things (IOT). Each of these new technologies has the potential to transform whole industries, lead to competitive advantage for those companies that successfully implement these technologies, and may lead to business models that have not even been considered yet. New business models – think: search intermediaries (Expedia), social sports communities (Strava) and sharing economy platforms (Airbnb) – exemplify the complex relationships between business models and technology.

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Search intermediaries exploit the fact that – despite price information being widely available on a range of competing travel websites, including airlines, hotels and car hire – it is difficult and timeconsuming to collect, collate and compare a comprehensive set of relevant information. The underlying technology of companies such as Expedia is a complex platform that interfaces with a large number of travel companies’ systems, collects a vast array of data and then uses smart algorithms to present meaningful comparisons in a fast and efficient manner to its own customers. Strava’s technology exploits social media capabilities to encourage a sense of belonging and camaraderie amongst groups of similar athletes, whilst also encouraging friendly competition as an important motivational tool to encourage continuing active participation in a range of sporting activities, especially cycling and running. In the case of Airbnb, the platform acts as an intermediary to broker availability, price and, crucially, to facilitate trust between the host and the guest by using social media to build profiles of the individuals interacting on the website.

In this way, strangers can be more confident that their guest or host has effectively been ‘vetted’ by (a) the platform itself, through formal identification checks, and (b) by other hosts and guests. The general point about these new business models is that technology was the catalyst for their inception. IT enabled their core business processes, and technology innovation is central to their successful evolution and continuing growth. Business models and technology partnerships New business models have some common technology and business characteristics: technology, which encapsulates the operations of business models; information flows, which define the core activities that generate value; and network economics, which play a crucial role in their growth and success. Innovative business models depend on the imaginative configuration of a range of concepts and ideas that collectively create a compelling proposition to customers. An overview of the relationship between new technology and business models is shown below.

New Technology Monitor and evaluate new technologies Evaluate the business potential of specific technologies through internal and external partnership arrangements

Question the status quo and offer challenger options

Questioning the status quo Innovation and experimentation are vital to encourage new thinking and to actively explore the potential for new business models, and an open culture is required that accepts questioning of the status quo. For new business models, pilot tests reduce the risk of investments, and when a potentially successful idea is identified, companies should be prepared to invest heavily and build customer share quickly by exploiting network economics. This could involve pioneering the use of new technologies or being prepared to emulate the successful features of market leaders’ business models.

Business Models New technology creates opportunities

Pilot-test new ideas and build fast growth strategies Trial alternative options and quickly test alternative business models Exploit network economics to encourage the growth of the platform

Use digital labs to test out new concepts and new business models Build strong partnerships with established technology companies as well as start-ups

Companies must have the capability to track and evaluate the emergence of new technologies, through a combination of in-house expertise and through technology partnerships. The most successful companies partner with a wide range of established technology companies, as well as with networks of start-ups. Universities can play an important role here by facilitating technology hubs that bring together academic experts, technology companies, start-ups and business organisations.

Track competitor actions and measure success against the market Novel business models require technology innovation

Pioneer new strategies where possible and emulate the best strategy features of market leaders

Christopher Holland is Professor of Information Management and a member of the Centre for Information Management. He can be reached on c.p.holland@lboro.ac.uk

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Interview with Professor Jan Wieseke

SHIFTING SANDS:

THE CHANGING NATURE OF SALES

Professor Dr Jan Wieseke, Founder and Partner of the German Institute of Sales Management (DIV) and Professor of Sales Management at Ruhr-University of Bochum in Germany, where he is Chair of the Sales and Marketing department, has joined the School of Business and Economics as Honorary Visiting Professor in Marketing.

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Jan Wieseke has an exemplary record of world-leading research in sales management, with specialisms in strategic and operational sales management in industrial and consumer settings, psychological phenomena in customer-salesperson interactions, social psychology in sales contexts and services marketing. With articles published in the most influential peer-reviewed journals, including Journal of Marketing, Journal of Applied Psychology, Journal of the Academy of Marketing Science, Journal of Retailing and Journal of Marketing Research, Jan is ranked as one of the top three sales researchers worldwide by the American Marketing Association. He is also a professional consultant, collaborating mainly with organisations looking to develop bespoke strategies for innovation, remuneration systems and other strategic sales management decisions. We were lucky enough to be able to interview Jan recently about his research and why the sales function in today’s marketplace is more complex and more important than ever. “One of the most significant observations in management is that digitisation is changing business models,” explains Jan. “The change in business models interestingly leads to increased importance of sales management and, in particular, of personal selling, at least for one part of the world – for the other part of the world, digitisation has made personal selling totally redundant. “The differentiation is in those areas where you have interchangeable products or commodities – here, online channels are mostly used, and this is the area where sales forces are becoming redundant. But where complex business models are used,” says Jan, “especially in the business-tobusiness space where the product is often multifaceted, personal selling is getting much more important. “Here, firms use outcome-based pricing models,” says Jan, “where customers don’t pay for the machine per se but pay for the usage of the machine and for the value they receive. In these areas, an educated sales force is needed, with often a team of salespeople working with just one client. So while the number of people in sales might be decreasing overall, those that keep their jobs will have a tremendously important task.”

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The new sales force The role of today’s salesforce is multidimensional – it is now often not just a product but also a service that is being sold, with predictive maintenance facets built into the machine and a specific value proposition for the customer that might be different from client to client. Therefore the selection and training has to be updated and strengthened by sales management, as well as the upskilling of sales team members.

construction industry’. It makes and sells more than 10,000 products but has recently steered away from simply selling its products, and is now focussing on leasing its products and on its software ON!Track, which manages the service of its products.

In addition, companies’ leading and compensation schemes need to be refreshed: “Sometimes I supervise and you sell,” says Jan, “sometimes we need to sell together, sometimes I need to coach you through the sale.” This makes the whole process quite involved and complicates the issue of compensation.

Future challenges With sales getting more complex, Jan believes companies need to really understand the customer, which places more emphasis not just on the sales force, but also on the relationship between strategic management and sales management.

—

“I think it’s the inter-functional coordination between these two departments that will be the next big innovation,” says Jan. “But also, competition is much fiercer now because of the globalisation of production and services. Emerging markets often have much cheaper labour costs which translate into a lower price, and customers will always go for the cheaper product.

“It is selling the promise of efficiency and effectiveness at any point in time. That’s a completely new business model.” — “As an example: Philips doesn’t sell scanners anymore, it sells packages that include not just the scanner but also software to run, say, an entire hospital, which means there’s not only one department involved in the purchase, the whole hospital is involved. So I need a team of sellers to relate to the team of buyers on the other side.” How do you compensate your salespeople in these multifaceted transactions where it might take a very long time, years, to negotiate a sale? Jan says the answer is probably to reduce the variable compensation and enlarge the fixed compensation, which also has an effect on the steering and leading of sales forces. Sales champions One of the fastest-growing companies in the world is the American CRM software giant Salesforce, which in June announced an investment of $2.5billion over the next five years in the UK: “Salesforce is gaining such incredible market share so quickly because it accounts for this new complexity in the sales arena,” explains Jan, “and makes it easier and more usable for both frontline employees and management.” Another champion according to Jan is the European company Hilti, which produces drilling machines. Hilti describes itself as a company that ‘services the professional

“Hilti is not just selling high-quality drills,” stresses Jan, “it is selling the promise of efficiency and effectiveness at any point in time. That’s a completely new business model.”

“If you are not re-evaluating your business model, especially in connection to sales management, then you run into ‘Death Valleys’” – a term coined by Professor Wieseke in a new book coming out later this year – “wherein you will run out of customers willing to pay, and you will not survive. And this process needs to be frequent – change is constant in this age, and so business models need to be frequently rechecked to ensure viability.”

Jan Wieseke is Visiting Professor of Marketing and a member of the Marketing and Retailing discipline group. Jan can be reached at j.wieseke@lboro.ac.uk and jan.wieseke@ruhr-uni-bochum.de 15

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By Dr Michelle Richey

INNOVATING FOR SOCIAL CHANGE REFUGEES AS ENTREPRENEURS Today’s most pressing social problems demand bold ideas and less-conventional approaches. The forced migration of millions of refugees globally is one such issue, described as a ‘wicked challenge’ – a problem that affects large populations with impacts that extend beyond the boundaries of a single organisation or community. The United Nations High Commission for Refugees reports that there are 65.6 million forcibly displaced people around the world, of which 22.5 million have sought refuge outside of their own countries. The UK itself is already more than half way towards meeting its commitment to the resettlement of 20,000 people through the Vulnerable Persons Resettlement Scheme (VPRS) by 2020. The challenges for these refugees continue upon arrival, as they attempt to re-establish their lives in a new, and often very different, cultural setting. Traditionally, government and not-for-profit organisations have offered support during this transitional period. However, the termination of the

Refugee Integration and Employment Service (RIES) in 2011 and the disbandment of the Minister of Syrian Refugees position in 2016 underscores the need to find sustainable solutions to these long-term problems that rely less on state funding. Enter the social enterprise. A social enterprise is an organisation that seeks to offer sustainable solutions to social problems by combining commercial and social orientations, enabling them to simultaneously address social needs while generating profit to sustain their activities. The social enterprise model has been used to address social challenges around the world, such as availability of credit for

the poor (micro-finance organisations), alleviation of hunger (sustainable food producers) and integration of the longterm unemployed back in to work (work integration social enterprises, or WISEs). By combining usually separate models and ideas, social enterprises become a hybrid form, creating something innovative and new by using existing organisational materials from different domains. This mode of sustainably innovating to address social challenges has been met with a swell of interest from both established organisations and new start-ups alike. Across Europe, there are examples of social enterprises that aim to integrate refugees

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and to improve their prospects in their new country. TERN is a notable example of a refugee-focused social enterprise. Based in London and currently working with myself and Professor M.N. Ravishankar (Head of the International Business, Strategy and Innovation group at the School), TERN aims to change the rhetoric about refugees and to improve their economic and social prospects by helping them into entrepreneurship. Since only two in five refugees find their way into employment in the UK, many see self-employment as a viable means of providing a livelihood. TERN founders Charlie Fraser and Fred Kastner also observed an inspiring entrepreneurial spark in the refugees they worked with at aid stations and camps across Europe and Africa. The barriers to entrepreneurship can be high for refugees, especially those lacking a credit history or access to business networks in the country they arrive in. TERN seeks to help refugees overcome these and other problems by offering an entrepreneurship programme and network of support for aspiring refugee entrepreneurs. Incorporated for less than two years, TERN has already collaborated with major multinational brands, including international management consultants Oliver Wyman and Ben & Jerry’s. TERN has already been hailed as a model for the refugee sector to take note of by the media and other research organisations. The IBSI group has an international reputation for social enterprise research and has been working closely with TERN for over a year. As well as providing

practical support, such as workshop space at the Loughborough University London campus and students who act as “buddies” for refugee entrepreneurs, IBSI is also conducting an in-depth analysis of the efficacy of TERN’s support programmes. In particular, Ravi and I are working with the refugee entrepreneurs to assess which elements of the programme are most empowering and, importantly, how psychologically safe participants feel throughout the process. The aim of the research is to help TERN offer a model of best practice to other social enterprises working with refugee entrepreneurs, and to share findings with policy makers and practitioners working in the refugee sector.

who, at one point in time, sought asylum and who have gone on to make significant social and economic contributions. Working with TERN has made it clear to us that entrepreneurship can be a powerful and innovative way of accomplishing social and economic inclusion. We look forward to sharing our results as they emerge. You can find many inspiring examples of refugees who have become successful entrepreneurs on www.centreforentrepreneurs.org - read their recent report: ‘Starting afresh: How entrepreneurship is transforming the lives of resettled refugees’.

There are already a number of useful insights from the research project that could be helpful to businesses and practitioners that want to engage with and support refugee entrepreneurs. Most importantly, entrepreneurship is a future-facing activity enabling these individuals to move forward rather than being stuck in the past. Therefore, it is best to make the business opportunity, rather than the asylum experience, the focus of discussions. It is also important to note that because they are operating in a new context, these entrepreneurs may lack access to business networks and capital – both areas that existing businesses can help with. Finally, once empowered, so many refugee entrepreneurs become mentors and advocates, continuing to be involved with the programmes and businesses that have supported them. The business community in the United Kingdom is full of leaders

Michelle Richey is Lecturer in Technology and Entrepreneurship and a member of the International Business, Strategy and Innovation group. Michelle can be reached on m.richey@lboro.ac.uk

— “Entrepreneurship is a future-facing activity enabling refugees to move forward rather than being stuck in the past.” —

LOUGHBOROUGH UNIVERSITY

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By Professor Thorsten Gruber

RAGE AGAINST OR RACE WITH THE MACHINE? THE RISE OF SERVICE ROBOTS It is very likely that service robots are set to impact all levels of society in the (near) future, which makes it important to examine the myriad ethical and societal implications of robotics.

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Ethical and moral principles guide human interaction and agency and influence decision-making and behaviour. The purpose of ethics is the improvement of the general wellbeing of all participants in society. Ethics especially focuses on protecting and improving personal integrity and human dignity. The increasing use and embrace of service robots will provide a series of ethical and societal challenges across all levels: micro (customers), meso (markets and organisations) and macro (society). In this context, ethics would focus on limiting possible inequalities caused by the advancement of robotics. Micro level Implications for customers Service robots can have many positive outcomes for customers. Just look at elderly care as an example that illustrates both important benefits as well as ethical and social issues. Service robots can carry out many tasks at the home for which visiting helpers are needed, such as cleaning, performing health checks, like blood pressure, or carrying. By providing these services, robots can give the elderly more independence and allow them to stay in their own homes for longer. There are, however, several ethical issues that have to be addressed: including security (robots could be susceptible to hackers), respecting both privacy (entering the bathroom when not required) and personal information (storing or sharing credit card information, for example) and the potential of dehumanisation (can robots be programmed to have emotions and be empathetic?).

— “There are major employment issues here, especially for low-skilled service workers, which could further increase the alreadygrowing societal division.” —

Meso level Implications for markets and organisations Robot prices have decreased at a constant rate of 10% annually over the last few decades, which is making this technology viable for an increasing range of service contexts. In comparison to people-based service delivery, robot-based service delivery is based on economies of scale, owning customer data, POS (point of sale) and the network. From a customer perspective, this can lead to a cost-effective, personalised and efficient service delivery. However, price reductions depend on how much of the cost savings are competed away and transferred to the customer.

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For the healthcare sector, in countries where provision is primarily private, fragmented and competitive, the chances of monopolisation are higher than in the UK, where healthcare regimes are mainly state managed. In addition, at the meso level, organisations will need to invest in innovations that integrate service robots into their offerings. However, not every service robot innovation may be successful. In worst-case scenarios, these potentially unsuccessful service robot offerings could be followed by legal action, in addition to the loss of the initial investment. Macro level Implications for society Synthesising the micro and meso level of implications of robot service delivery, several societal implications arise, including technology adoption, which is low for the older generations; the availability and affordability of robotics and robotically delivered services; and, of course, the controversial and headline-making issue of job or salary loss. There are many academics and industry experts who regard robots as a serious threat to service workers and overall employment. In light of this, there are many that believe that service workers who want to stay in their jobs will have to upgrade their empathetic and intuitive skills – in other words, “people skills” – as they will be crucial for employability. Conversely, by pairing robots and humans there is potentially the opportunity that they can complement each other, make work more productive and interesting and help provide better services for lower costs. Personally, after having conducted a very thorough literature review on the research in these areas, I believe, along with some others in the community, that we should not be too consumed with generalisations. New technologies are normally slow to be adopted, and it is likely that societies will find ways to adjust to changing technology and business environments by carrying out new tasks and thereby avoiding mass unemployment. And finally, new technologies have also always created new jobs. That said, I also agree that there are major employment issues here, especially for low-skilled service workers, which

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could further increase the already-growing societal division. The challenges ahead Increased service robot use will likely impact every level of civilisation with both ethical and societal challenges. Seeing the pervasiveness of service robots for the future, organisations, government and society will need to address the various issues described in this article in order to move forwards, positively, into a roboticsbased future. A widespread adoption of service robotics, and the resulting likelihood for a net loss of employment, could mean that governments would have to consider providing their citizens with a safety net. They could do so by introducing a so-called Universal Basic Income (UBI), which would replace existing income-redistribution programmes. Perhaps, as suggested in an article in The Economist, the use of service robots would allow people to work less, or not at all, and spend more or all time on things they enjoy.

— “Human dignity, self-respect and a role in the community are important factors that have to be considered in addition to monetary considerations.” —

However, not all people work to make a living but see it as a source of pride that gives them a meaning in life, which cannot be replaced with UBI. Human dignity, selfrespect and a role in the community are important factors that have to be considered in addition to monetary considerations. These are, indeed, important and difficult issues that societies will have to deal with in the future. One challenge that needs to be addressed immediately, however, is the concern around privacy and security of data. With increased service robots use, very intimate data will be increasingly easy to access and thus, if no regulations exist, increasingly easy to harvest. Recent scandals around data harvesting from social media have provided the world with a glimpse of what the future may hold. From a customer perspective, not only are new laws and regulations needed, but also transparency and further education as to what types of data service robots collect, store and have access to. Only if societies address the issues outlined in this article can the rage against the machines be turned into a race with the machines.

Thorsten Gruber is Professor of Marketing and Service Management and Director of the Centre for Service Management. Thorsten can be reached on t.gruber@lboro.ac.uk

LOUGHBOROUGH UNIVERSITY

By Tony Dawson and Professor Peter Kawalek

MAPPING THE BRAIN UNDERSTANDING HOW WE PROCESS DATA Understanding how we process, understand and consider the world around us, and then use that information to make decisions, is a central theme at the School of Business and Economics.

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As part of the University’s Ambition in Decision Sciences, SBE researchers have set up a new Decision Sciences Lab, led by the Centre for Information Management and the Management Science and Operations group in the School, to help further the research being carried out across the discipline groups. Using scanning techniques, we can now measure the brain and nervous system activity of people processing information and making decisions. The facility supports methodological progress, enabling further development of topics relevant to the development of our digital society and economy and is managed by doctoral researcher Tony Dawson, a member of the Centre for Information Management. One of the research projects currently taking place using the Lab involves investigating the effectiveness of visual imagery over text for presenting and processing information. Dr David Roberts, who has been using images as the basis for his lectures for several years and has published on how this improves student engagement, (see Inspire Issue 12: “Life after death by PowerPoint”), is collaborating with Tony to better understand the physiological processes involved in data consumption. People may talk about “death by PowerPoint,” but it is at the heart of education and pedagogy in universities, and it is the medium for presenting information for decision making in most companies and organisations. So which are better? PowerPoint slides with images, with text, or a bit of both? Richard Mayer’s theory of multimedia learning holds that a person’s cognitive workload is reduced if they learn from material presented in two modalities. We already know that when images are used, they are processed in 24

the visual cortex of the brain. This should reduce the cognitive workload in the pre-frontal cortex, which is the seat of executive functions, like attention and working memory, allowing learning to be easier and more engaging.

— “With these advanced techniques, we are seeking to extend our understanding of the effects of different content and forms of information.” — This has been studied using cognitive psychology methods, as well as eye tracking, but not using any form of brain imaging. Mayer’s most cited article on multimedia learning concludes that the recommendations should reduce cognitive load, but that it would be useful to have direct measures of cognitive load. Fifteen years later, that has not yet been done. In this research study, we have designed an experiment with alternating image and text slides separated by blank resting slides, so the brain’s activity can revert to the baseline level. The hypothesis is that an image with a spoken narration generates less cognitive workload than a text slide with the same narration.

We are using a range of psychophysiological devices to measure the activity of the nervous system and brain. This involves established methods of electrocardiograms (ECG) and electrodermal activity (EDA) allowing comparison of their results with previous findings. In addition, they also have two devices with functional near infrared spectroscopy (fNIRS), which measures the same effect as functional MRI, but with devices that are portable, user-friendly and much cheaper. Think rugby cap with lots of tiny holes with wires that connect to a processor. The scalp and skull are partly transparent to near infrared light, but haemoglobin in the blood absorbs or reflects light. fNIRS works by shining infrared light into the brain and measuring the reflected light. From this we can calculate changes in the oxygenation of the blood in the brain, which is responsive to workload. Using our available equipment, it is possible to have one device measuring visual workload at the back of the brain and another device measuring cognitive workload in the prefrontal cortex. Early results are encouraging and show cognitive workload to be higher with text slides, as measured by the oxygenation in the prefrontal cortex.

‘

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— “When images are used they are processed in the visual cortex of the brain.” —

These fNIRS devices are widely used in medical research and also for safety critical research, such as aviation, air traffic control and power stations. Loughborough seems to be the first university to use them in business school research. In addition to this, we have also invested in eye-tracking devices, so we can see what people are looking at when they are processing information on a computer screen or whilst walking around an office or supermarket. Perhaps not quite as menacing as the 1980s film ‘Looker,’ but significantly powerful in understanding how our brains work when we take things in visually. In our next experiment we will be working with police officers. Before every shift or operation, police officers receive intelligence briefings – almost always by PowerPoint. These briefings consist of images of suspects and vehicles, with lots of text about names and places. This means that these police briefings are similar to our multimedia learning experiment, and thus we can potentially apply insights and lessons from that setting.

We hope to establish principles that can be used to create more effective intelligence briefings, helping the police retain information better and to be more effective operationally. Ultimately, we’re hoping that such information contributes to a complex risk assessment of the threat, harm and vulnerability facing police officers, contributing to the safety of police officers and the community through this work. It is often reported that digitisation has brought us into a new kind of information society, wherein workers, students and consumers all encounter a plethora of informational prompts and effects every day. With these advanced techniques, we are seeking to extend our understanding of the effects of different content and forms of information in critical decision settings. Through careful development of key experiments, we plan to reach deeper into the theory-base underlying Information Management and Decision Sciences.

Tony Dawson is a doctoral student in the Centre for Information Management and can be reached on a.j.m.dawson@lboro.ac.uk Peter Kawalek is Professor of Information Management and Director of the Centre for Information Management. Peter can be reached on p.kawalek@lboro.ac.uk

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THINKING ETHICALLY OF DATA COLLECTION AND USE

LESSONS FROM CAMBRIDGE ANALYTICA By Dr Daniel Sage

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On 17th March this year, The Guardian and The New York Times both released an interview with Christopher Wylie, former Director of Research at the British data consultancy firm Cambridge Analytica. In his interview, Wylie explained how during his work at Cambridge Analytica he became involved collecting Facebook data, without consent, from over 50 million American voters, developing psychometric profiles of these voters with that data, and then working for Republican Party groups to target these voters with psychologically customised campaign materials designed to manipulate the 2016 Presidential election. At the end of the interview, Wylie likened his work to a cacophony of confusing whispers in the ear of every voter, whispers that deny the possibility of shared understandings. Taken to its fullest extent, this fracturing of shared experiences, he warned, will break apart the bonds that hold society together. What is not acknowledged by either Wylie or his interviewer, Carole Cadwalladr, is that there is a certain paradox underlying this doom-laden scenario that I will use here to introduce a significant, and largely ignored, set of ethical questions raised by the Cambridge Analytica scandal. But first, what exactly is ethics? The short answer is that ethics is the study of what is morally right and what is wrong, how we think society ought to be and how we think it ought not to be. While philosophers over the course of centuries have wrestled with these distinctions, creating many more divergences than convergences in how we might define right from wrong, all ethical theories have a strong relationship with society and truth.

of social media and big data can also produce the exact opposite: the combined use of social media and data analytics in the pursuit of narrow interests and agendas to mobilise and foster divisions between social groups, often through the production of fabricated and individualised information. Wylie opined that in certain combinations social media platforms and data analytics are being harnessed to unravel concepts of society and truth. Should we take this to mean that a certain data infrastructure is now being developed that may over time render ethical thinking significantly less possible? Let’s look at ethical thinkers of the past, such as the Enlightenment philosophers John Stewart Mill and Jeremey Bentham. For them, a moral action is one that produces consequences that benefit the highest number of people in society, whether for pleasure (Bentham) or happiness (Mill). Here, morality cannot be understood without thinking about society as a whole, and identifying truths regarding the social consequences of our actions. We might consider the Open Data strategy by the UK government to make data freely and openly available as aiding a utilitarian ethics. Conversely, if we only experience the world through microtargeted information – whether political campaigns, consumer adverts or limited interactions with similarly micro-targeted work colleagues and friends – we are likely to become less, not more, enlightened, regarding the wider consequences of our actions for society as a whole. Society effectively stops existing in the moral imagination. Ethics is not possible.

Now, the paradox: we are often told that the growth of social media platforms, like Facebook, creates new social bonds, bridging gaps in our increasingly geographically stretched and frenetic lives; that society is strengthened as citizens can access and share all manner of information digitally. The ensuing collective knowledge can then be jointly curated to prevent narrow interests and agendas from manipulating information to divide and control citizens. In short, if knowledge is power, digitised knowledge means power can be shared more equally.

Next, what about those working at Cambridge Analytica – how can we understand their capacity for ethical thinking? To think through this concern we might turn to Emmanuel Levinas, a 20th century French philosopher. Levinas was concerned with how we might cultivate our moral imagination to be ethical by reflecting upon and changing our relationships with other people. There are effectively four ways we can think about other people: as objects for our own ends; the same as us; as different to us; or as uniquely other to us and capable of changing our moral imaginations. For Levinas, only the latter relationship provides a pathway for ethics.

However, Cambridge Analytica and its partners evidenced how this blending

Let’s now consider how Wylie and other recently interviewed former colleagues

depict the different ways Cambridge Analytica staff treated the users whose information they gathered. Sometimes they treated them as objects, or data points, for their own ends to improve their psychometric models (and generate more business from the Donald Trump campaign team). Else they imagined they were the same as themselves – that the users they collected data from would have acted in the same way if they had the chance. Or they thought about the users as entirely ‘other’ to them, occupying separate, remote, lives. For Levinas, none of these ways of relating to other people enables ethical thinking. Instead, thinking ethically requires we connect with the profound ‘otherness’ of other people in a way that opens up our moral imagination: we should empathise while allowing that empathy to change us. Thinking ethically in this way involves relating to others to produce shared truths about who, across society, no matter how distant, is tied to our actions, how we relate to them, how they feel about those actions, and what is the connection between us and them, as well as an openness about how their radical difference can change us. In short, ethics often requires a strong understanding of society and truth. If we are unable to discern either, we cannot act ethically. Despite Cambridge Analytica being put into administration by its owners, the ramifications of the scandal are far from over. I am aware of five legal actions and government inquiries that are ongoing within the UK and US, many relating to the sharing and use of data without informed consent.

— “Ethics often requires a strong understanding of society and truth. If we are unable to discern either, we cannot act ethically.” — Dr Kogan, a Cambridge University academic commissioned by Cambridge Analytica to provide it with data through a Facebook personality quiz app, has returned to work in the University’s Department of Psychology. Kogan denies any illegal action, although Facebook maintains he broke their longstanding Platform Policy by selling data to a third party (Cambridge Analytica).

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Some former Cambridge Analytica employees and associates remain employed at ‘sister’ companies within the parent group, SCL. However, all of those involved deny that the data collected by Cambridge Analytica still exists and is being used; although, given the ease of hiding data offline in a small memory card or hard drive, this is seemingly impossible to verify.

— “Many of the practices exposed in the scandal remain relatively commonplace and highly marketable.” —

What is more, many of the practices exposed in the scandal around the strong links between narrow political interest groups and mass data mining, psychometric profiling and micro-targeted advertising, remain relatively commonplace and highly marketable. These practices continue to be developed through extensive academic research (including at Cambridge University). What is lacking across the practitioner, academic and public debates is a more serious examination of the ethical issues raised by the scandal. As I have sought to argue here, the diminishment of understandings of truth and society, which this scandal portends, suggests the widespread emergence of an entire data infrastructure with the power not just to enable immoral actions, such as denying informed consent, but to short-circuit the possibility of ethical thinking. Whether or not such a doom-laden scenario will happen cannot be determined unless the wider ethical implications of data analytics, beyond privacy and consent, are better acknowledged and debated.

Daniel Sage is Senior Lecturer in Human Resource Management and Organisational Behaviour and a member of the Centre for Professional Work and Society. Dan can be reached on d.j.sage@lboro.ac.uk

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By Dr Clive Trusson

RESPONSIBLE MANAGEMENT IN THE INFORMATION AGE The field of data analytics offers companies the potential for gaining (or not losing) competitive advantage. But in the previous article by Dan Sage, his message is clear: the organisations that employ data analytics to support their decision making should be ethically responsible.

As Dan writes, this goes beyond having a concern for privacy and consent. It is easy for society to wag its finger at Cambridge Analytica in particular, but in the face of the increase in new analytical technologies being used for everyday management decision making, there is a need for organisations to consider the ethics embedded in them. Here at the School of Business and Economics, we are proud to be a signatory of the United Nations-backed PRME (Principles for Responsible Management Education), and as such are keen for our students to recognise management as a practice that should be executed responsibly. This calls for them to be critical thinkers who engage with discussions of not only the benefits but also of the dark side of new technologies. Back in 1936, Charlie Chaplin in his feature film ‘Modern Times’ parodied new technologies being introduced into factories at that time. There is a particular scene where Chaplin takes an illicit cigarette break in the gents toilet, and suddenly the boss appears on a big screen behind him and tells him to get back to work. Chaplin’s social commentary is clear: such management surveillance technology is unethical, and society should resist it. Fast forward to the Cambridge Analytica scandal, and we can connect Chaplin’s argument with how they camouflaged 30

their surveillance objectives within enticing personality quizzes. This surveillance was then not only conducted on the people doing the quizzes, but on their Facebook contacts as well, who, like Chaplin, didn’t know they had been put under surveillance. If we now consider the ethics of modern organisational managers, then we might reason that new technologies brought in to offer them greater managerial control actually often disempower them of their capability to act with ethical agency, because ethics are already designed and fixed into the technologies. Specifically, managerial surveillance (or what is sometimes called ‘dataveillance’) technologies have over recent times become commonplace in modern organisations, and there is no sign of the trend for greater surveillance of what goes on in the workplace abating. These technologies are often marketed as ‘analytics’ or ‘operations’ technologies and are presented as embodying the ‘white heat of technology’ for the information age. They are implemented to routinely enact surveillance by, for example, automatically capturing individual performance data. In effect, they apply the business mantra of ‘If you can’t measure it, you can’t manage it’ to people. Implicitly, such surveillance technologies treat workers as if they were machines to be quantitatively monitored or, if we draw on the philosophy of Levinas

(as Dan suggests), as objects that serve managers’ own needs. The signing of an employment or work contract might legally justify an organisation in collecting performance and activity data about their employees, but the ethical question concerning surveillance of human beings as citizens with human rights remains. Of course, the issues raised by Dan are fundamentally ones for society in general. The instinct of corporate leaders is often to resist political oversight in the form of regulations and legislation, but, as the Cambridge Analytica case illustrates, a regulatory framework is essential to ensure responsible management for the benefit of society.

Clive Trusson is Lecturer in Human Resource Management and Organisational Behaviour and a member of the Centre for Professional Work and Society. Clive can be reached on c.r.trusson@lboro.ac.uk

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By Dr Kemefasu Ifie

IDEA GENERATION AND EMPLOYEE MOTIVATION IN THE SERVICE SECTOR Perhaps more so than any other type of organisation, service firms are constantly faced with the challenge to innovate: as customersâ&#x20AC;&#x2122; needs evolve, as technology introduces changes to the environment, as data becomes more available, as established patterns of service delivery are disrupted (which began in retailing with companies like Amazon).

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Two related processes are important when discussing service innovation. The first is the development process (generating new service offerings or new delivery patterns); the second is the process of commercialisation and the evaluation of the outcome. Both issues are crucial, but let us in this article highlight the first process, specifically the contribution of frontline employees to service innovation. Frontline employees can contribute to service innovation as co-creators, idea generators and as implementers of service innovations. Because of their boundaryspanning role, frontline employees are uniquely positioned to sense market needs and generate ideas for innovative offerings. From a management perspective, leveraging on this makes business sense. My own research in this area investigates how individual characteristics and elements of organisational structure interact to explain frontline employees’ success in generating ideas for service innovations. Using the MotivationOpportunity-Ability (MOA) framework, which suggests a complementarity among motivation, opportunity and ability in influencing outcomes, I evidenced three distinct processes that drive idea generation: contextual motivation, employee out-group interaction and opportunity recognition ability. Let’s look at the framework more closely: 1. Motivation reflects the dynamic, personal energy that drives the performance of an action. 2. Opportunity captures the situational, exogenous elements that either inhibit or enable action. In my research I drew on the notion of ‘structural holes’ to propose opportunities for out-group interaction (the extent to which an employee has opportunities for work-related interactions outside their primary work group, with other departments, organisations and customers), as a key structural element that drives idea generation. 3. Ability refers to the set of specific skills and proficiencies needed to achieve a goal. In this context, I developed the term ‘opportunity recognition ability’ (the ability of employees to detect resource misallocations in the service environment and define customer or service problems), which I see as a key skill that enhances employees’ contributions to service innovation.

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Motivation is critical because innovative idea generation often results from employees sourcing knowledge from customers and other stakeholders they engage with, and investing time to think about and evaluate ideas. Such efforts are often discretionary, and as such are likely to be stronger and more sustained when employees are more motivated. On the one hand, redundant information is present when employees in the same work group interact, but on the other hand, interactions across group boundaries present opportunities for unique sources of information. The more such opportunities exist, the more options employees have to select from, offering a better chance of generating innovative ideas. A motivated employee thus has a much richer pool of potential ideas to work with when they have more knowledge-sourcing opportunities as result of out-group interactions. Furthermore, motivated employees will be better equipped to benefit from out-group interactions when they have the skills to accurately define the problems they encounter, ask the right questions and evaluate potential ideas they may generate or source from others. What we found – using data collected from frontline employees in a large service organisation, which we analysed using structural equation modelling – was that employees generate more, as well as better, ideas when motivation, opportunity and ability are all high.

need to improve general work motivation of employees as well as the more contextual motivation for idea generation. Creating a culture that values new ideas is a crucial step. It is also likely that the benefits of improving motivation for innovative idea generation extends beyond gaining more input from frontline employees into service innovation; it may also help to ameliorate some of the problems firms face when frontline employees are tasked with implementing service innovations. In essence, employees who contribute to service innovations are more likely to be willing to implement innovations. While these findings are interesting, firms only benefit when ideas are implemented and commercialised. Consequently, in collaboration with colleagues from various institutions, the next phase of my research into service innovation will address how organisations decide on what ideas or concepts from the service development process to implement.

If your organisation would like to engage with us on this or a similar research study, please get in touch!

However, there are some interesting differences in the way the three predictors independently and interactively relate to these outcomes. In terms of direct relationships, only motivation directly impacts on idea generation. Yet high opportunity recognition ability combined with high motivation positively influences idea generation. Furthermore, opportunity for out-group interaction only affects idea generation when combined with both high motivation and high ability. The conclusion, it appears, is that employees only make effective use of opportunities for out-group interaction for idea generation when they are both skilled and motivated. The key managerial implication is that managers need to focus on improving motivation, ability and opportunity for ideation. Perhaps most importantly, given the central role of motivation, managers

Kemefasu Ifie is Lecturer in Marketing and a member of the Centre for Service Management. Keme can be reached on k.ifie@lboro.ac.uk 33

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By Emma Leech

THE POWER OF AUTHENTICITY

SOCIAL MEDIA IN TODAY’S DIGITAL WORLD The world is changing; traditional patterns of buying behaviour are in tatters. We live 24/7 lives and expect to be able to access information in ‘Martini time’ – anytime, anyplace, anywhere.

Crucially, we expect to do that on any device. We also expect it to be easy and quick to find, user friendly, potentially media rich and above all, truthful and authentic. It’s a global phenomenon that brings marketers huge opportunities, and our increasing fascination with all things social has led to a radical rethink for brands and organisations alike. The internet turned many traditional marketing methods on their head. Broadcast is dead; engagement is king. 34

As trust erodes, the role of influencers is growing and the importance of advocacy increasing. A recent 2017 report from UCAS (who deal with admissions to universities) noted that online reviews by other students are viewed as influential in decision-making behaviour by 77% of potential students, ranking just behind university open days at 85%. Loughborough has been swift to put social and digital activity at the core of

its marketing strategy. Collaboration has been at the heart of our strategy working with partners such as the Students’ Union to understand audience needs, whilst our PR and media operations have become increasingly interdisciplinary with a focus on thought leadership, content strategy and shareable syndicated video. Academics, as well as students, are at the heart of our work. Research dissemination and news stories are now shared increasingly online with video, imagery and

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blogs shared on social channels as likely to be consumed by audiences as a ‘hard’ news story. Our General Election Campaign, for example, provided a showcase for academic expertise that was picked up not only by media but by top-flight institutions across the globe.

old school print and savvy PR activity to deliver stand-out results and huge ROI. Amongst its many accolades, it won a CIPR Excellence Award and a PRCA Best In-house Consumer Award (the Marks & Spencer Mrs Claus campaign was runner-up).

In PR terms, column inches are increasingly less meaningful than reach, impact and social sharing. A positive here is that the growth of “fake news” has seen a swing back to thought leadership from trusted experts.

Social media is a channel of choice for many of our audiences. We have seen huge growth in Snapchat, Instagram and LinkedIn alongside the growth of YouTube, YouKu (the Chinese version of YouTube) and the use of group chat via Messenger and WhatsApp.

Edelman’s well-respected Trust Barometer notes renewed confidence in technical experts and academics (63% and 61%, respectively), which, coupled with shifts in how we present research stories at a global level, has seen Loughborough increase its coverage by 23% in the past 12 months – way ahead of our competitor set. Loughborough’s approach has been to think about new and emerging channels in the context of data, engagement, reach and creativity, and to harness the power of advocacy through social sharing, a digital-first approach and a combination of storytelling and strategy. It’s creativity rather than cash that fuels our work, and that’s an extremely positive message for many of our audiences in an era of fees, cutbacks in research funding and increasing competition. Over the past decade, the marketing sector as a whole has seen a huge swing away from traditional PR, marketing and advertising techniques (and spend) to more agile, nimble and targeted digital approaches. Unsurprisingly, increasingly tech-savvy audiences know when they are being “sold to” and as a result, authenticity is the new buzzword. Loughborough’s first big digital campaign won the Guardian’s HE marketing and communications award and used social sharing, selfies and branded “photoframes” (part of a customisable postcard-style approach to welcoming new students) to achieve cut-through on results day. That was in 2015, and less than three years later, whilst frames may be passé, that learning has fed into several subsequent campaigns, including the multi-awardwinning Golden Ticket campaign. Golden Ticket delivered income worth over £4.6m for a total spend of just £2,300 and used a mix of web, digital, social media sharing,

Facebook continues to be a staple, but behind all we do is a detailed content strategy that allows us to re-use video and other ‘evergreen’ content, customisation of information to make it channel relevant, and a real focus on micro-engagement, including one-to-one conversations with potential applicants, alumni, journalists and many other audiences. Tone, pace and appropriateness are crucial, and we have used student takeovers on specific themes across many of our channels, focusing on authenticity and allowing our audiences to tell their own stories in fresh and inspiring ways. It goes without saying that our more standard communications (emails, print and related materials) also signpost back to our online presence, allowing us to build advocacy and reinforce our messages across different platforms.

As Richard Branson famously said: “Your brand name is only as good as your reputation”.

Emma’s Top 5 Tips: 1. Social media can be a powerful tool for engagement, reputation and brand building, PR and advocacy, marketing and sales, customer service and crisis communications. Don’t just leave it to a junior member of staff and hope for the best! 2. Social should be an integrated part of your marketing strategy. A solid, underpinning content strategy is essential if you want to maximise returns. 3. Use the channels your audiences use, and tailor content to suit their needs. Avoid the latest ‘shiny’ gimmick or channel unless it is business relevant. 4. Insights and analytics should shape your strategy. Try not to be subjective – let the data guide and support your creativity. 5. Make sure the senior team understand social even if they don’t use it personally. That way you can avoid damaging reputational headaches and maximise marketing and engagement potential AND be ready if you need to use if for crisis communications.

Pure marketing aside, one of the most exciting opportunities we’ve seen has been around advocacy and building brand loyalty. This year, Loughborough was named number one in the Times Higher Student Experience Survey (as voted by students), and we were also successful in being named What Uni? University of the Year. Loughborough has the highest net promoter score in higher education, which is one of our strongest assets in terms of advocacy, sharing and endorsement. Who do you want to believe? A marketing person with a corporate message, or someone like you who is proud, positive and passionate about the quality of the institution? We’ve recognised the power of our networks and work hard to amplify and share messages, promoting our alumni, our staff and our students, and building on the growing reputation of the University nationally and internationally.

Emma Leech is Director of Marketing and Advancement at Loughborough University and President-Elect of the Chartered Institute of Public Relations. Emma can be reached on e.j.leech@lboro.ac.uk

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By Dr Silvia Masiero

BALANCING THE INCOME-GENDER GAP IN EMERGING ECONOMIES

WOMEN AND MOBILE INCOME GENERATION Over the last few years, global development policies have become increasingly centred on the potential of information and communication technologies (ICTs) for poverty reduction. This has entailed a spike in the efforts of ICT usage for crucial causes, such as that of empowering women and girls living in developing country contexts.

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— “With this issue now being discussed at the international level, questions about the type of empowerment fostered by mobile phones, as well as the mechanisms through which this is enabled or constrained, must be asked.” — The World Development Report 2016 states that ICTs allow women to achieve greater participation in the labour market, resulting in forms of income generation that trigger female empowerment. At the same time, the United Nations formulated Sustainable Development Goal no. 5, stating that global poverty reduction entails the enhancement of “the use of enabling technology, in particular information and communications technology, to promote the empowerment of women”. Resonating across different development organisations, statements of this kind are based on the recognition of a link between technology adoption and development, which has strong implications for the theory and practice of female empowerment. The use of mobile phones and mobile internet is growing exponentially around the world, and its growth – much faster than that of fixed lines or desktop internet – yields visible potential for social development. As a result, the focus on poverty reduction globally needs to be accompanied by the ability to disentangle the specific mechanisms through which ICT enables development in practice. In particular, one of the key routes to female empowerment is income generation. With this issue now being discussed at the international level, questions about the type of empowerment fostered by mobile phones, as well as the mechanisms through which this is enabled or constrained, must be asked. Crucially, what kinds of income generation can these devices enable for women? And what implications does this have for development management? My colleague Savita Bailur (Caribou Digital, LSE) and I have sought to answer such questions in a research project that looked at data collected from 30 focus groups in Kenya, Ghana and Uganda, consisting of women and men, aged 18 to 25, living on less than $2 a day. The focus group data allowed us to shed light on the mechanisms flowing between mobile internet usage and income 38

generation, through the narratives of women who were online and operating in resource-constrained environments. In all three settings, we found that mobile internet offered income-generation opportunities for women, creating new mechanisms of income generation that involved the creation of new microbusinesses and the expansion of existing ones. However, in terms of translating income generation to empowerment – conceived in terms of transforming power relations in favour of women’s rights – the female respondents’ narratives cast some doubt. In spite of the new opportunities that were created by ICTs, we found a range of preexisting cultural stereotypes that had been transferred to these new technologies. Mobile phone adoption, in particular, does not seem to challenge old cultural norms discouraging women from seeking independent work.

low-income women, there needs to be underlying, supportive policies in place that can sustain women’s inclusion and challenges the stereotypes that still exist. While technology alone is not sufficient to balance the income-gender gap here, there are strong reasons to believe that its integration in a transformative policy framework will mean a significant step towards women’s empowerment.

The full research paper by Savita Bailur and Silvia Masiero is published in the journal Gender, Technology and Development and is available online. The research was conducted with Emrys Schoemaker and Jonathan Donner for Caribou Digital and MasterCard Foundation.

In addition, policies underlying mobilebased economic activities are found to be mostly static over time and are hardly challenged by the advent of digitalisation. From a theoretical standpoint, the study illustrated a link between the adoption of mobile devices and empowerment of women in emerging economies. By ascertaining the presence of mobile-based income-generation opportunities, combined with limited translation of these into gender empowerment, our study sheds some light on this link for these below-povertyline women in the three African countries researched. In terms of development policy, the study reveals that the adoption of mobile devices is far from gender neutral, and shows limited ability to challenge existing maledominated sociocultural structures. While we did not hear of outright restriction of devices by men in our sample groups, what we did see was persistence of patriarchal cultural norms and lack of belief by women in terms of potential for societal change. It seems very clear therefore that for mobile adoption to be effective in empowering

Silvia Masiero is Lecturer in International Development and a member of the Centre for Service Management. Silvia can be reached on s.masiero@lboro.ac.uk

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BUSINESS INSIGHT by Jeff Prestridge

Empowering consumers A few of my journalist colleagues sometimes accuse me of being a Luddite, craving for a financial world of yesteryear. Where every High Street had a bank run by a friendly manager who knew everyone in the community. Where building societies thrived, and men – rarely women, sadly – from the ‘Pru’ knocked on your front door and collected your insurance premiums and encouraged you to do the right things. Although I admit my spectacles are occasionally rose-tinted, my critics get me wrong. I do not pine for a time when face-to-face interaction was the norm (although I admit the banking industry’s refusal to entertain the idea of shared branches in towns and villages where it has left communities bank-less is shameful). As a passionate consumerist, all I want is for financial services to be customercentric; for consumers to be at the heart of their operations. Like most industries, financial services has undergone a revolution in recent years as a result of the power of the internet – and, more recently, the mobile app. Innovation (or ‘fintech’ in the financial services sector) is rife, and most of it is welcome. It has empowered, making it easier for people to carry out their everyday financial transactions – be it buying a coffee (via contactless or Apple Pay),

banking or shopping around for insurance when their existing policy comes up for renewal.

innovation counts for nothing if the supporting infrastructure is not robust enough.

It has transformed the way some businesses work. For example, a couple of months ago, I spent an hour or so in Aviva’s ‘digital garage’ in North London learning about how they are employing technology to speed up insurance claims and make it easier for customers to review online the various products they have with the insurer. It was enlightening.

It is also essential that in introducing innovation, stellar customer service is always part of the equation. Enabling people to transact effortlessly is all well and good, but there needs to be adequate support in place when things go wrong. My work email account is chock-a-block with correspondence from customers who believe a complaint they have against a financial services company has not been adequately dealt with.

It has also increased competition, sparking the creation of new ‘challenger’ businesses. We now have banks specifically set up to provide current accounts via mobile apps. Slowly but surely, their business models are building customer traction and providing an alternative to the traditional High Street bank.

Innovation? Of course, bring it on. But not for the mere sake of it. It has to be in our best financial interests. In the interests of consumers.

Artificial intelligence is also beginning to feed into the way some financial services companies go about their business. Robo-advisers are now building portfolios for investors. Although such automated advice companies have attracted some criticism from City regulators for not providing everyone with suitable advice, they are here to stay. In time, they will become more refined, more sophisticated. Of course, innovation represents progress. But in embracing new technology we need to ensure that the financial services industry always puts first the consumers’ best interests and protects them at all times. As the calamitous IT meltdown at challenger bank TSB recently highlighted,

Jeff Prestridge is a Distinguished Alumnus and Personal Finance Editor of The Mail on Sunday. He can be contacted via Twitter @jeffprestridge

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Loughborough University School of Business and Economics