Social networks, intelligence, and homeland security


Some of the more discreet applications of social network analysis that have greatly intensified over the last years are in government intelligence, law enforcement, and homeland security. On one-level “network-centric warfare” (see for example the US Department Defence report to Congress on this) has grown to prominence – or even predominance – in military strategic thinking over the last four years. Leading network analyst Valdis Krebs published an interesting analysis of the terrorist networks involved in the tragedy of September 11, 2001. However social network analysis has been applied by intelligence agencies and law enforcement for decades. If you can uncover and analyze the relationships between people, places, organisations, transactions, and more, rather than just data on each of them individually, anomalies and intriguing connections rapidly come to the surface.

Interestingly, two Australian software companies are world leaders in applying social network analysis in these domains. Netmap Analytics emerged from work done in the 1980s by Dr John Galloway, who received his PhD in 1974 from Michigan State University for some of the early ground-breaking work on social networks, cybernetics, and systems theory. Netmap is used extensively by intelligence and law enforcement agencies around the world, in applications such as tracking money laundering and insider trading, as well as more covert applications. The software excels at processing extremely large data sets of relationships, and picking out the anomalous or interesting relationships. Insurance and retail fraud are other important applications. The Distillery has provided software primarily to the intelligence, defence, and law enforcement communities for around seven years, and now has around 70 employees. Its new Interquest Analytics front-end can be used by intelligence analysts to extract “entities” and “relationships” from the vast array of public (so-called “open source intelligence”) and non-public information, providing a deep and rich pool for analysis. The Interquest platform itself helps integrate disparate data sources to enable effective network analysis. Lockheed Martin has an extremely sophisticated tool for extracting relationships from text, called Aerotext. Netmap has the Australian and Asian distribution rights for this product, as it provides fantastic input for its high-powered network analytics engines. As companies with highly complementary offerings, Netmap Analytics and The Distillery often collaborate in showcasing and implementing their products.

In a world increasingly based on networks, social, technological, and otherwise, intelligence – government or commercial – must be based on understanding the relationships and connections in the world around us. This is a field set for massive growth.

The future of public relations


A few days ago I gave a keynote speech at the Public Relations Institute of Australia’s premier national conference for the owners of PR agencies – a very interesting crowd who are well in tune with the flow of messages through media and society. I covered three key themes:

&#149 Client relationships. Despite many PR agencies presenting themselves as doing “outsourced PR”, that’s not what clients today want. The future is in collaborative relationships, working closely with clients to combine your expertise.

&#149 Social networks. Today, everything is a network. PR agencies need to move closer their clients to the center of the network, by creating richer and more diverse connections. They also need to apply social network thinking to how they bring together their own expertise and link that to that of their clients.

&#149 Memes and blogging. The concept of memes – information and ideas that replicate and propagate from mind to mind – is a powerful and useful way of thinking about how messages flow through society. Blogging has provided us with a world in which memes can flow fluidly and freely. Media – the traditional domain of PR – is blurring into a far more complex and variegated world in which messages can flow across many dimensions.

The resulting challenges for PR agencies are to lead their clients into collaborative relationships; to connect to help their clients move to the center of the networks; and to make their clients into media participants. Media today is a participatory sport, and PR agencies can no longer act as interfaces and gatekeepers for their clients. This means they must develop and apply new skills, especially in the new participatory media. Blogging is a invaluable tool for many organizations, yet they do need help to do it effectively.

Apart from frightening a few PR agencies who recognize that they need to quickly get on top of the rapid changes in their world, it was encouraging to see the degree of energy that is going into exploiting these shifts. The only thing that remains is renaming the industry. I was asked what it should be called if public relations wasn’t appropriate. Off the top of my head I suggested “The Meme Industry”. Any better ideas?

Round-world book speaking tour


I’m just about to embark on a quick round-world trip to promote my new book Developing Knowledge-Based Client Relationships 2nd Edition. I’ll be speaking about the book, client leadership, and how to “lock-in” your clients to some great groups along the way. Full details and registration information is at

Dates and organizers:

San Francisco: KM Cluster, September 27

Seattle: Company of Friends, September 29

Boston: Company of Friends, October 4

Toronto: HelixCommerce, October 6

London: Managing Partner Forum, October 10

Hong Kong: Hong Kong Knowledge Management Society, October 13

The feedback on the new edition has been extremely pleasing. The new chapters in this edition – Chapter 6 on implementing key client programs (which is available for free download) and Chapter 9 on leading relationship teams – as well as the updated section on technology in client relationships, seem to have particularly struck a chord with major professional and financial firms. As a result I’ll be fitting in various client work on my travels. Firms are recognizing that the work they put into enhancing their capabilities at client relationships will be amply repaid.

I hope to see you along the way!

Aggregation is the word


One of the most important concepts of the digital world is aggregation. The Internet gives us access to far more information and services than we can handle. We have to choose what we access, unless there is a way of bringing together relevant sources into one place. In this vein, Lycos has recently released a dating seach aggregator, which allows users to search for potential partners across iMatchup, loveaccess, Matchmaker, and True. One point provides access to all of the people across these sites. A company currently getting a lot of attention, Oodle, searches and aggregates classifieds listings across eBay, Craigslist and many more sites. Why go to the individual sites when an aggregator can give you access to them all? The increasingly open nature of the Internet, based on web services, published APIs (application programming interfaces), and other tools to integrate digital flows, means that aggregation is far easier to implement than in the dot-com days. Expect many more innovative plays in this space.

Professional services jobs hit outsourcing


Nasscom, the premier technology commerce body in India, has just released a report saying that 35,000 legal jobs will move overseas from the US by 2010, while Forrester Research says that 12,000 legal jobs had already gone overseas by last year. A wide variety of US and UK law firms in particular have gone down the route of outsourcing not just back office work, but also professional work. Last year Hildebrandt – a high-end legal consultancy – and Office Tiger – an Indian outsourcing company – launched a service offering business process outsourcing to law firms, helping make this a mainstream strategy. One of the seven drivers of professional services I described in Developing Knowledge-Based Client Relationships is Modularization. This describes how technologies such as web services enable business processes to be broken down into smaller modules, each of which can be performed inside or outside the firm. Professional firms must have more standardized work done by cheaper providers, or they simply will not be competitive. It will take some years, but starting from now low to medium-level professional work will increasingly be done outside professional firms, and often across national boundaries. The shift has begun.

The Future of Money


Money is information. It would make sense that as we rapidly become hyper-connected, financial services will be transformed. Yet the pace of change – so far – has been slow. We still use notes, coins, and credit cards for most transactions. Certainly Internet banking and bill-paying is standard fare, however the promise of e-money and smart cards is yet to be fulfilled. So what is the future of money? I gave the keynote address at a recent industry forum, organized by Online Banking Review to address this topic. The conference summary provides an overview of what the participants – including myself, Richard Watson of What’s Next, and senior executives from a range of global and national financial institutions – discussed at the event. Competition is at the heart of the matter, with a swathe of financial services entrants from sectors including retail, telcos, utilities, technology and more now more able than ever to move into the most valuable elements of the customer offering. Trust, distribution channels, and pricing were the other key themes of the forum. I’ll explore some of these themes in more detail on this blog over time.

Intellectual capital shifts towards maturity


The world of measuring intellectual capital has gone through some highs and lows over the last decade. Coming from a capital markets background, I was excited when in the mid-1990s significant attention began to be paid to the valuation of intangible assets, and I was involved in a number of initiatives of institutional investors to value intellectual capital. In a knowledge-based economy, the tangible assets of a company – which is all an accountant can assess – have little correlation to the worth of the firm. However I soon realized that a couple of decades of hard work would be required to get traction on the issues, and I was happy to leave that slog to others. Now some of the hard work is really starting to pay fruit. The GAP Congress on Knowledge Capital in Melbourne, Australia in early November has high-level government support, and will establish a “Melbourne Protocol” on developing and implementing intellectual capital reporting. The background reading provided for the conference provides a good overview of the current state of intellectual capital reporting. The current poster-child is Denmark, whose Ministry of Science, Technology, and Innovation provides guidelines to companies on how to implement intellectual capital reports, and where a broad array of companies provide supplements to their annual reports. Intellectual capital supplements will be where the real action will take place over the next years. The question is which of the major players in the reporting space: listed companies, investors, regulators, and third-parties (e.g. auditors), will drive the uptake?

Manufacturing goes personal


The amazing eMachineShop represents a turning point in personal manufacturing. The company enables anyone to create machine-shopped pieces using a vast arrray of techniques including milling, extruding, thermoforming, water jet cutting and far more, on any choice of materials, to create whatever they want. The company provides free, extremely easy-to-use 3D CAD (computer aided design) software which automatically inputs into their systems, so you can, within an hour of having logged onto their site, sent off a design to be created. The applications are vast – in essence you can make for yourself anything you want, at a low cost. No more unavailable car parts or overpriced spare parts for machinery, and sculptors can simply imagine their sculptures rather than work for years to acquire mechanical skills. The next phase from here is the rise of “fab labs“, where the creation of the piece is done in your own office or home rather than having to be sent away. This truly is about power to the people. What will be unleashed by the power of these tools, available to anyone?

The rise of online services exchanges


I frequently refer to online services exchanges to illustrate the inexorable drive of globalization and commoditization. These sites, such as, – both of which cover all personal services – specifically for software development, the Europe-based, and a host of others, allow anyone anywhere to post a job they need done, and to get talented professionals globally to bid their lowest price for the work. Graphic design, web development, marketing, writing, administration, sales – anything that can be done virtually is offered on these exchanges. Elance’s tagline “Everyday Outsourcing” says it all, particularly when 40% of work performed crosses national borders. The exchanges first rose during the dot-com boom, then struggled, with notably eLance changing its model – as many other B2B exchanges – to selling software and corporate processes to complement the actual exchange itself. Now the approach has been validated and increasingly, independent professionals are offering their services online. The most obvious implications are global competition, and that services are becoming commodities. Most professionals who experiment with the sites are shocked at the prices at which some people are prepared to offer their services. Yet some people do make a good living from the business they win on the exchanges. The exchanges bring home the idea of “polarization” that I believe is one of the key aspects of the future of work. Many people around the world will find their work increasingly commoditized in the face of global online competition, with constant pressures on fees and their livelihoods. However those who have deep specialist knowledge, and can create unique insights and value by collaborating with other knowledge specialists – be they colleagues, professionals at other firms, or at their clients – will command an increasing proportion of economic value. These are realities of the network economy. Yet we must guard against the dangers brought about by this polarization.

When is the next tech boom?


The New York Times reports on increasing valuations for start-ups, with venture capitalists having to pay more to get into deals such as the recent rounds for the school social networking company Facebook and podcasting platform Odeo. That these companies are so hot is a great illustration of the themes explored by this blog.

On another level, this is one possible early-warning sign of another tech boom. For around four years now the technology sector has been subdued, hardly surprising after the extravagances of the dot-com boom. What’s interesting is that in this decade we have in fact seen many of the wild predictions of the late 90s quietly come to pass. Moving on from the selling-pet-food-over-the-Internet phase of technology commercialization, there is now a swelter of new technologies and – more importantly – applications that are compelling (or at least appear to be). Social networking technologies, pattern recognition, bioinformatics, new generation content production and distribution, location-based services and far more represent some of the new wave of opportunities. I believe it is inevitable that at some point within the next five years we will go through another technology boom, perhaps not dissimilar to that of the turn of the century. Those fateful words: “This time it’s different,” will be heard. So for those that missed out on the first boom, position yourself well!