Volume 73: Performative Diversity.

1. Empiricism as an act of random subjectivity.

tl;dr: We need to stop insisting that only what we can count counts.

Cory Doctorow is one of those brilliantly prolific people who seems to have 20 better ideas in any five-minute period than you might have yourself in a year. And while his science fiction novels are a dystopian delight, it was some recent societal commentary that caught my eye.

Here, he discusses the inherently subjective nature of empiricism and why empirical models are so prone to failure. His point is that when faced with qualitative data, empiricists are more likely to ignore it completely than try to make sense of it:

This is the quant’s version of the drunkard’s search for car-keys under the lamp-post: we can’t add, subtract, multiply or divide qualitative elements, so we just incinerate them, sweep up the dubious quantitative residue that remains, do math on that, and simply assert that nothing important was lost in the process.

While significantly less important in the big scheme of things than a pandemic or the regulation of monopolies, business and marketing decisions are made on the basis of “the dubious quantitative residue that remains” all the time.

Just the other day, I was talking to a very large company I’ve been working with and heard the statement that “our decisions are made based on data, not sound-bites.” And sure enough, they’re awash with quantitative data on everything you could possibly want to measure and vastly more that you would not. But even a cursory diagnosis of their brand and the experience they’re creating for customers and employees tells you there’s a deep disconnect between their quantitative decision-making and the reality of the lived experience these decisions create.

And they’re decidedly not alone in their aversion to the fuzzy richness of qualitative data that gets labeled “sound-bites.” It’s why I suspect so many Silicon Valley companies model themselves more on Google than on Apple. Even though Apple is more successful, it’s easier for engineers and the financially minded to wrap their heads around the explicitly quantitative Google approach to decision-making than Apple’s more fuzzy commitment to creativity.

More widely in business, however, cracks in quantitative decision-making have been forming for years. Just look at the rise of design-thinking within corporate America. At first, I thought this was some fancy new thing, but then I realized that it’s nothing more than a mechanism for opening the rational and empirically minded up to the kind of qualitative problem-solving that empiricism consistently fails at.

In my experience, quantitative data only ever gets you so far; it’s the qualitative where all the richness lies. I liken it to having a powerful telescope. Quantitative data is like the small spotter scope that sits atop the main scope; its value is orienting you roughly toward the star you want to look at, but it doesn’t give you much focus. It’s the qualitative magnification that gets you up close and personal.

This is important because so many companies make all of their decisions based on the spotter scope. By shifting so much attention to quantitatively modeling our customers and focusing only on their behaviors, we singularly fail to understand how any of it makes them feel or what really matters to them.

And yet, it’s this very reality that brings opportunity to the enlightened. If others are only ever going to be vaguely right because of their commitment to the empirical, we can get things really right by competing on the qualitative. Not limiting ourselves to doing math on the dubious quantitative residue, but instead reveling in the fuzzy richness of that which cannot easily be measured.

2. Performative corporate diversity.

tl;dr: Pride pushback and recycled boards.

As the country faced a deep societal reckoning last year, corporations realized that it was no longer in their own best interests to sit on the sidelines. Pressure from employees, customers, broader society, and the conscience of business leaders themselves combined to force a realization that things really do need to change and that diversity and all of the richness and fairness that it brings to the table really does matter.

The act of accepting the need to change then triggered a series of uncomfortable knock-on questions: How to make it happen, how much disruption to embrace, how much change to drive, and how much they really, deep down, actually meant it.

Now, I cannot in good conscience underplay the challenge facing corporations as they attempt to shift from the largely white, straight, male leadership of today toward something more equitable. The issues at hand are systemic and societal, so there is no easy and quick fix. This is a generational project not just for us, but more likely, our children.

But I did hold out hope that diversity and equity would be tackled in a more thoughtful fashion rather than as corporate theater, but as the data flows in, I’m yet to be convinced.

Chief Diversity Officers have been hired at a faster clip than ever before, which is a necessary first step, but they note that the scope of their remits are all too often infinitesimal (Paywall). At the top of corporations, boards are actively seeking greater minority representation, also a necessary first step. But what we’re seeing is the same few acceptably diverse faces being invited to sit on more boards rather than new faces, viewpoints, and perspectives coming to the table.

While first steps obviously matter, they aren’t in and of themselves meaningful as acts of change. And, at worst, when done in this fashion, it leaves corporations open to claims that the whole thing is nothing more than an act of performative diversity.

A concept that has been brought into sharp relief this past week as Pride month began. Against a backdrop of an increasingly hostile and cruel law-making environment, particularly against trans people, corporations are being challenged to walk their LGBTQ talk rather than just paying lip service to a potentially valuable customer segment.

Unfortunately, as any visit to social media illustrates, claiming solidarity by placing a freshly rainbowed logo onto your LinkedIn, Twitter, or Instagram profile seems like nothing more than a performative act if you aren’t at the same time ensuring that your corporation treats everyone with dignity, respect, and understanding, whether they be employees, customers or simply people the company has influence over within society.

However, as depressing as some of this may seem, it at least moves things forward somewhat. Where I hold out most hope is in the attitudes of the young.

While I generally don’t believe that we should tar millions of people with the stain of cliche based on nothing more than their date of manufacture, we do see some distinct patterns emerge from those labeled Gen Z: They’re younger, they’re browner, they’re less interested in binary definitions, they’re smart, articulate, they get modern communication, they’ve had enough of the status quo and aren’t willing to give anyone a hall-pass when it comes to not doing what they say they’re going to do. (Note to self: even their parents) This is a cohort that isn’t just demanding change; they expect it. And if it doesn't come, they’ll make it happen themselves.

And this, more than anything else, is why smart corporations need to get past the performative stage of diversity quickly. Not just because they have the wherewithal to make something happen, but because the future of their corporations and the permission they’ll have to operate will literally depend upon it.

3. Company nobody has heard of takes down the Internet. Stock surges.

tl;dr: Fastly a surprising example of mental and physical availability.

If you pay any attention at all to the writings of Prof Byron Sharp, you’ll have heard of the concept of mental and physical availability relative to brand growth. They’re straightforward concepts in practice. Mental availability means that when you have a need, you think of that brand. Physical availability means that when you have a need, the brand is physically available and easy for you to buy.

Think Coca Cola. It spends billions of dollars making the world think of Coke when thirsty and billions more ensuring that a Coke is always within arms reach.

As a result of its proven success, this is probably one of the most powerful concepts any brand can enable for itself and runs contrary to so much of the modern penchant for personalized activation-based marketing. But that’s a story for another time. Right now, I want to talk about Fastly.

If you’ve never heard of Fastly, you wouldn’t be alone. It operates an obscure business that places internet content in servers closer to where people are to improve page load times, bizarrely labeling themselves an “Edge cloud platform” in the process, because that’s the kind of idiotic narrative framing that tech firms love to wrap themselves in.

Anyway, interestingly, this week it had a problem. A problem that took down some of the biggest names on the Internet for over an hour. This meant that far from its normal status as obscure B2B technology company nobody had heard of or, if they had, couldn’t easily understand, suddenly Fastly was in the news and on the lips of millions. Causing more than a few people to say, “Wow, look at all the amazing companies that are customers of this Fastly thing. Maybe I should buy some stock.” And so they did, and the stock surged.

Why? Because the news made it mentally available and the status of the customers it took out gave it a salience that being “the edge cloud platform” does not. Then the rapid rise of retail trading driven by free-trade apps gave it instant physical availability, meaning the time between thinking of buying the stock and actually buying it was reduced to mere seconds.

It’s interesting to think about this. We’re used to considering brand effects relative to customers and their purchase decisions. However, as retail investing continues to boom, companies are going to get savvier about using branding techniques to drive investment decisions too. There’s a reason AMC and Gamestop have risen so far, and it isn’t just about r/wallstreetbets, diamond-hands, and the short-squeeze. A lot of it is simply about the spike in mental availability and salience the online conversation has driven in two brands that a whole generation of at-home-traders grew up buying video games from and going to the movies with.