It Pays to Know What You Don't Know

Knowledge is power but much depends on how asymmetric it is: what do you know that others don"t and vice versa. Below are four strategically different levels of know-how plus some of the strategies you can use to leverage each to advantage.

The complex issue of handling asymmetric information is central to the field of game theory-- a rigorous analytic discipline used widely in economics, business, strategy, political science, law and more. I"ll address here the mind-twisting problem of how much you know about what others do and don"t know, and conversely, what they know about what you do and don"t know. This may seem esoteric but we encounter such issues daily. Let"s start simple and then build up the layers of asymmetric know-how.

Level 1: Only You Know About a Misdeed. Suppose you find out that your main competitor has stolen some of your intellectual property (IP) or other assets, and is using this against you. It could be some proprietary software, a customer list, a supplier contract, wage scales, your pricing strategies, or other confidential know-how. Often the IP thieves will be within the organization, as happened to the National Security Agency and numerous companies in such fields as oil & gas, agricultural seeds, and all manner of technology. The U.S. Department of Commerce estimated that IP theft has accounted for trillions in lost value. Much of this comes from industrial espionage by outsiders as well, especially China, although many countries and rivals play this game.

Your first reaction when learning that your secrets were stolen may be to cry foul and call the lawyers. But there may be advantage in you knowing something about their misdeeds while they don"t know that you know. First, you could infringe some of their IP as payment in kind, with a soft hint that two can play this game. This may lead to tacit collaboration, a formal licensing arrangement, or conflict resolution less costly than an ugly shoot out at high noon with legal gun slingers. Also, reconciliation can build understanding, trust or even empathy. For example, when parents find out that their young child stole some of their cash, smoked pot or drank alcohol, they can jump all over the kid or gently signal awareness, in ways that allow for face saving self-correction and maturation of the child.

Level 2: The Other Party Knows You Know. Suppose, however, that your competitor finds out on its own-- without you having informed them-- that you know that they have violated your IP. What should you do in this symmetric knowledge situation about the violation? First, it may not be truly symmetric because the rival may not know that you know that they know. This is akin to a child knowing that his parents found out about the smoking or drinking, while still being unsure about whether they know that he knows that. For example, it could be that the maid told the child that the parents know. As before, it may be wise to keep such meta-knowledge (i.e. what each of you know about what the other knows) asymmetric since the situation may automatically correct itself. The child will either stop his misdeed or become even more devious perhaps-- although he now realizes that his parents are not as clueless as he previously assumed.

Level 3: A Child Knows His Parents Know that He Knows. Suppose that the child discovers, perhaps from the maid, that his parents now know that he knows that they have uncovered his nefarious deeds. This would be embarrassing, even though some semblance of ignorance can still be feigned, since his parents have not directly confirmed this by confronting him. Perhaps the maid lied and is playing her own game to get the child to cease his infractions, concerned that the parents will blame her for not telling them. Without complicating this layer cake further, with the maid"s varying degree of knowledge and hidden agendas, it should be clear that knowledge asymmetry can happen at multiple levels.

The first is knowledge about presumed acts of behavior (such as an IP infringement). The second level concerns the parties" awareness about what the other side knows and doesn"t know. The game theory aspects of just the two-party conflict becomes more complex at this higher strategic level. It will seldom be optimal to put all cards on the table if tactical advantage is the aim, since judicious signaling, while avoiding loss of face, may lead to better outcomes. In international negotiations about violations of trade agreements, for example, a piecemeal approach may lead to better outcomes than fully escalating the conflict with hurt egos and further recriminations.

Level 4: Full Parity - Everybody Spills the Beans. Suppose, however, that parents tell their child that they know he knows that they know; the strategic situation now will reach a different level of meta-knowledge yet. If the indirect approach mentioned in level 3 does not work, then in anything from corporate disputes to child rearing to marital infidelity, it may pay to put all cards on the table. If restricted to one single issue, such as a stolen customer list or a child smoking pot, talking it all out may--perhaps with the help of a professional counselor--be cathartic. But when multiple issues are at stake, or if there are more than two aggrieved parties, the situation may call for seasoned negotiators who know when to separate or combine issues. One problem is that you will never know for sure that everyone has shared all they know, although legal clauses with punitive damage levels may get you close.

The general advice in complex cases of conflict is to pursue principled negotiations rather than positional bargaining, as explained in Getting to Yes. Try to agree on the principles that should govern the issue to be negotiated, such as trade dispute or a salary raise, before haggling about dollars or concessions as though you are in a bazaar. For example, should the primary reference point when hiring new managers be their past salary, your own internal payment scale, or the amount an outside party is offering them? Once you agree on that in principle, the remaining negotiation will be much easier. Also remember that good negotiators spend more time understanding the other side"s hopes, fears, and context than just their own agendas, plus any knowledge asymmetries that might exist.

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Three Important Things Non-Programmers Should Know About Programming

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What are the three most important things non-programmers should know about programming? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Ken Mazaika, CTO & Co-founder at thefirehoseproject.com, on Quora:

Early in my web development career I realized that there were three things that were critical for every non-programmer to know before interacting with programmers in a professional setting.

My experience building a single feature with a non-technical product manager taught me these lessons almost immediately.

Let me explain...

I was working with Colin, a non-technical product manager who was responsible for driving the direction of the product and working with my team, the development team, to implement features for our product.

As a developer, Colin was great to work with. The feature requests he created were always really well thought out. He always had all the edge cases accounted for and he drew detailed wireframes, diagrams of what the expected behavior of the feature should look like.

But then, all of a sudden, Colin had a feature request for our team that caused a major problem for our entire development team!

Colin gave our team a wireframe diagram of our application that had an additional checkbox that would allow a user to store their credit card information on the platform.

The feature request seemed simple enough, but because of laws and regulations about credit card information (specifically PCI compliance laws), storage of credit card information is something that is highly complex and regulated.

Despite seeming simple, supporting this one feature in our application would require a complete rewrite of our code.

I brought this issue up to Colin and at first he didn’t get it. "All I’m asking for is a simple checkbox, it can’t be that difficult to add", he said. I explained that adding the checkbox would be super easy, but making the checkbox do what it claimed would be the difficult part.

Colin then did something that proved that he was the type of product manager who got things done.He explained, "Let me explain why I wanted to include the ability to allow a user to save their payment information..." and then Colin explained that after making a certain type of purchase, it was very common for users to make a related purchase shortly after.

Together we realized there was a solution where we could prompt the user to purchase both items at the same time, instead of worrying about storing the payment information. This was a solution that would give Colin everything he wanted and be ten times easier to implement for our team.

Together with Colin, we implemented this solution. This experience taught me that there are only three things that non-programmers need to focus on when working together with other developers.

They’re also easy lessons to learn...

1. Communicate the technical details to developers quickly and efficiently.

There is no more effective way to explain functionality of an application than showing a developer wireframes of proposed changes.

2. Things can appear to be easier to implement than they actually are.

Be open to the idea that things that seem like they should be really easy can be much more difficult to implement in practice.

3. Provide context about why you think things are important.

Explain the why behind the thoughts you have in situations where you’re getting pushback from developers — if you do this you’ll find yourself working together with them to solve problems.

Remember that you are have the same end goal as the developers you’re working with — to provide the best experience possible or the application you’re building.

Follow these steps and the developers you’re working with can focus their energy on being the best developer they can be. And if you’re a developer you can focus on the 29 Behaviors That Will Make You An Unstoppable Programmer.

This question originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions:

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After Supreme Court Decision, the Business of Sports Is About to Change Radically. This Expert Explains What You Need to Know.

I’m a baseball fan. When I lived in the Bay Area, I was a season ticket holder to the San Francisco Giants. And every baseball fan knows about Pete Rose, the preternaturally talented player who scandalized his sport when it was revealed he bet on baseball, including games involving his own team. Now, no one is contemplating allowing players or managers to bet on games in their own sport. But the Pete Rose story serves as a grim reminder of what can happen with sports gambling.

The trouble is that sports gambling is fun! The thrill of making some dough on your team just adds to the excitement of the sport. It’s also hugely profitable for business and government. So when the Supreme Court of the United States released their decision on Murphy vs. NCAA last week, the gambling-loving world rejoiced. SCOTUS determined that the 1992 federal law called Professional and Amateur Sports Protection Act (PAPSA) violated the Constitution’s anti-commandeering clause, thus striking down the law.

Mark Conrad is a professor of law and ethics at Fordham University, where he has taught in the School of Law and in the Gabelli School of Business. He’s also the director of Gabelli’s Sports Business Concentration, and is the author of The Business of Sports -; Off the Field, In the Office, On the News. Professor Conrad was kind enough to share with me some of his thoughts on this landmark decision.

1. Nothing’s Actually Changed…Yet.

The Court’s decision caused an avalanche of news and commentary, but, “At the moment, not much has changed,” says Conrad. The decision opened the door to huge change, but nothing is actually different yet. Conrad explains, “The court declared unconstitutional the Federal law that prohibits sports gambling. It did not sanction or permit sports gambling.” So what happens now? Conrad says no one really knows: “It is now up to the states, or the federal government, to decide.” Here’s where it get interesting!

2. The Devil Is in the Details.

“This story is only beginning,” says Conrad, who also has a degree from Columbia’s School of Journalism. “No state has enact a gambling scheme, although New Jersey may soon,” he says. The question is what happens next. For starters, Conrad asks, “Will states legalize it? And if so, which ones, and when?” Next comes the what. Conrad wants to know, “Will it apply to all sports or just pro sports?” And finally, the how. Conrad ponders: “What will be the license fees for companies wishing to do business in the state? Taxes? Anti-corruption measures?” The potential complexities are endless.

3. Congress May Not Be Done.

The Court may have struck down Congress’ PAPSA law, but that doesn’t mean Congress can’t still have the final word. Conrad explains, “The problem with PAPSA was it prevented states from exercising their powers. The law did not mandate a ban on sports gambling - rather, it told the states they were not allowed to enact laws ‘authorizing’ such gambling schemes.” The problem was the way this law was structured, but not the idea behind the law. In fact, Conrad says, “The decision did state that Congress has the power to enact a ban on gambling.” It’s possible Congress could throw some very cold water on all the excitement.

4. Integrity May Be an Issue…Or May Not.

The potential implications for the integrity of sport are fascinating. As with any gambling, there’s risk of corruption. Conrad recalls, “It has occurred in the past, notably in point-shaving in college sports.” But cheating isn’t a given. “In fact, the risk of corruption may decrease with a properly regulated integrity oversight,” Conrad explains. There are examples the US could look to for inspiration. Conrad says, “The UK model has worked well. The betting companies engage in analytics and metric systems to police suspicious gambling patterns and report these anomalies.” The key is not to over-regulate or over-tax it, which may push otherwise legal gambling underground.

5. This Decision Could Have Major Implications for State Versus Federal Authority.

“This is the underlying constitutional issue in this ruling,” Conrad explains. “Ultimately, it is a constitutional law case regarding state powers under the Tenth Amendment.” Here’s his plain-English explanation of the finer constitutional points: “PAPSA was problematic because it ‘commandeered’ states rights. Instead of banning sports gambling, it said could not enact laws authorizing gambling. It’s a subtle difference, but a constitutionally defective one.” This is an important decision in part of a greater shift. According to Conrad, “It continues a trend to give greater deference to state sovereignty.” It will be fascinating to watch as the complexities continue to develop.

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American Airlines Passenger: 'My Checked Bag Smells Awful, Like Something Died In It!' (Little Did She Know)

Other than that, Mrs. Cannon, how was the flight? 

A lot of things went wrong on Leighton and Merry Cannon"s recent trip to Europe on American Airlines. But, as Merry Cannon said in a phone call, the worst part was probably right at the very end: when she discovered a dead rat in her checked luggage.

Yes, a dead rat--"smashed," as she put it--yet hidden, so that she wasn"t sure what was creating the "disgusting" smell that came from her bag when she picked it up at the airport. She brought it home unwittingly, despite the odor, hoping to clean and salvage at least some of her clothes. 

"It smells like a dead body."

The story began early March 5, as Merry Cannon told it. Her husband had a business trip in Germany and France, plus a short visit to London to see family. Since his mother was free to come to their house in Arkansas to take care of their two small children for a few days, Merry decided to go along. 

Travel troubles mounted quickly: delayed and canceled flights, missed connections, an unplanned overnight stay in Chicago after their flight to Germany left without them, while American tried to find room for them on any airplane to Europe. Ultimately they had to fly to Brussels, Belgium instead, forgo the German part of their trip, and arrange to drive a rental car to Lille, France.

When they arrived in Belgium, however, they found that their luggage had never left Chicago. It didn"t catch up to them until their last night in France, just before their morning flight to London to see family for the day before heading back to the U.S.

Eventually, they made it home to Arkansas, and Merry collected their bags. The smell now emanating from her luggage nearly knocked her over, she said.

"Smell this," she said to her husband. 

"It smells awful!" he replied.

"It smells like a dead body."

"It smells so gross."

Maybe it"s "just" sewage waste from a lavatory

Leighton tried to sanitize the handle with Clorox wipes. They brought the bag to a customer service agent, who speculated that maybe it had been left on a runway in the rain at some point during the five days it took to catch up with her, and the smell was from mold.

Merry said she was skeptical, as they hadn"t noticed a smell when the luggage caught up to them in France. Perhaps, the customer service agent suggested, it had been stored under a lavatory on the plane, and sewage waste had dripped onto it.

Disgusted by that idea, Merry Cannon asked for a garbage bag or something to avoid taking the bag. But the agent told her the airline would only compensate her for destroyed luggage if she first brought everything home, tried to wash it, and offered evidence that it didn"t work.

The Cannons threw the bag in the back of their truck, and left it on the back porch of their house when they got home. The next morning, Merry Connor opened it, pulled out a few articles of clothing, and held her nose. She dropped them in the washing machine with vinegar, bleach, Tide, and OxiClean.

It barely had an effect. Disgusted, she walked back to the porch. And then she saw the dead rat.

Her reaction: "I"m surprised the people next door, building a house--the construction workers--didn"t call the police. I screamed, ran inside, started washing my hands over and over. I was just crying."

"Your biggest concern would be bubonic plague"

She called American Airlines. They told her to photograph everything in the bag, and to put in a claim. The person she spoke with at the airline was apologetic, she said, and promised that the airline would pay for everything. 

Then she called the county health department.

"This is awful," she said the health department official told her when she described the rat situation. "I"ve never heard of anything like this. Your biggest concern would be bubonic plague."

"The plague? What am I, in a sitcom?" She thought about her two young children. Had she unwittingly brought a bubonic plague-infested rat into their home?

"Rats carry the plague," the heath official told her. "Your other worry would be fleas. That"s what carries disease." Later, he added, "Burning garbage is illegal, but that bag needs to be burned."

Merry and Leighton took photos, and disposed of the bag and its contents. She said she hoped American Airlines would make her whole--at least for the actual value of the things she lost.

"I realize this is not the outcome you requested"

An American Airlines representative emailed her, saying the airline would pay her $ 1,648, "maximum liability set by the Montreal Convention ... for a trip with an international flight."

"I realize this is not the outcome you requested," said the note, which was signed by a "specialist, central baggage," in the Central Baggage Resolution Office. "[H]owever, I appreciate this opportunity to address your concerns and explain our position. We hope you will give American Airlines another chance to earn your business."

I asked American Airlines for comment. Here"s their statement:

We have apologized and are not aware of any similar issues of a rat making its way into a checked bag before. While we are unable to determine if the issue occurred in the United States or overseas, we did apologize to the customer, and they were compensated earlier this month.

NOTE: Based on the Montreal Convention and applicable international tariffs, liability limitations for international travel are 1,131 Special Drawing Rights (SDR) per ticketed passenger. This applies to all airlines for international travel. SDR (Special Drawing Rights) is an International Monetary Fund unit of currency. SDR"s will be converted to U.S. Dollars using the rate in effect on the mishandled baggage settlement date. That is what was compensated. If you convert 1,131 to U.S. dollars, it is around $ 1,600.

It wasn"t enough, Merry Cannon replied. The bag itself was a Samsonite that cost $ 300, she said, and she had three pairs of boots that cost $ 200 each, "plus I had dressy clothes, and workout clothes." Some of the things she"d brought were brand new, and stillahd the tags on them.

Cannon said she tried several more times to get someone from American to discuss her case, and see if she could get anything beyond the $ 1,600, but to no avail. Eventually, she posted the photo of the rat and her story on Facebook and Twitter.

"You could have just paid me for my bag, and none of this would have been out here," she said. "I"m never flying with them again."

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Before Investing in Artificial Intelligence, You Should Know These 4 Things

IPsoft is, in many ways, an unusual entrant into the crowded, but burgeoning, artificial intelligence industry. First of all, it is not a startup, but a 20-year-old company and its leader isn"t some millennial savant, but a fashionable former NYU professor named Chetan Dube. It bills its cognitive agent, Amelia, as the "world"s most human AI."

It got its start building and selling autonomic IT solutions and its years of experience providing business solutions give it a leg up on many of its competitors. It can offer not only technological solutions, but the insights it has gained helping businesses to streamline operations with automation.

Ever since IBM"s Watson defeated human champions on the game show Jeopardy!, the initial excitement has led to inflated expectations and often given way to disappointment. So I recently met with a number of top executives at IPsoft to get a better understanding of how leaders can successfully implement AI solutions. Here are four things you should keep in mind:

1. Match The Technology With The Problem You Need To Solve

AI is not a single technology, but encompasses a variety of different methods. In The Master Algorithm veteran AI researcher Pedro Domingos explains that there are five basic approaches to machine learning, from neural nets that mimic the brain, to support vector machines that classify different types of information to graphical models that use a more statistical approach.

"The first question to ask is what problem you are trying to solve." Chetan Dube, CEO of IPsoft told me. "Is it analytical, process automation, data retrieval or serving customers? Choosing the right a technology is supremely important." For example, with Watson, IBM has focused on highly analytical tasks, like helping doctors to diagnose a rare case of cancer.

With Amelia, IPsoft has chosen to target customer service, which is extraordinarily difficult. Humans tend not to think linearly. They might call about a lost credit card and then immediately realize that they wanted to ask about paperless billing or how to close an account. Sometimes the shift can happen mid-sentence, which can be maddening even for trained professionals.

So IPsoft relies on a method called spreading activation, which helps Amelia to engage or disengage different parts of the system. For example, when a bank customer asks how much money she has in her account, it is a simple data retrieval task. However, if a customer asks how she can earn more interest on her savings, logical and analytical functions come into play.

2. Train Your AI As You Would A New Employee

Most people by now have become used to using consumer facing cognitive agents like Google voice search or Apple"s Siri. These work well for some tasks, such as locating the address for your next meeting or telling you how many points the Eagles beat Vikings by in the 2018 NFC Championship (exactly 31, if you"re interested).

However, for enterprise level applications, simple data retrieval will not suffice, because systems need domain specific knowledge, which often has to be related to other information. For example, if a customer asks which credit card is right for her, that requires not only deep understanding of what"s offered, but also some knowledge about the customer"s spending habits, average balance and so on.

One of the problems that many companies run into with cognitive applications is that they expect them to work much like installing an email system -- you just plug it in and it works. But you would never do that with a human agent. You would expect them to need training, to make mistakes and to learn as they gained experience.

"Train your algorithms as you would your employees" says Ergun Ekici, a Principal and Vice President at IPsoft. "Don"t try to get AI to do things your organization doesn"t understand. You have to be able to teach and evaluate performance. Start with the employee manual and ask the system questions." From there you can see what it is doing well, what it"s doing poorly and adapt your training strategy accordingly.

3. Apply Intelligent Governance

No one calls a customer service line and asks a human to talk to a machine. However, we often prefer to use automated systems for convenience. For example, when most people go to their local bank branch they just use the ATM machine outside without giving a thought to the fact that there are real humans inside ready to give them personalized service.

Nevertheless, there are far more bank tellers today than there were in before ATMs, ironically due to the fact that each branch needs far fewer tellers. Because ATMs drastically reduced the costs to open and run branches, banks began opening up more of them and still needed tellers to do higher level tasks, like opening accounts, giving advice and solving problems.

Yet because cognitive agents tend to be so much cheaper than human ones, many firms do everything they can to discourage a customer talking to a human. To stretch the bank teller analogy a little further, that"s almost like walking into a branch with a problem and being told to go back outside and wrestle with the ATM some more. Customers find it incredibly frustrating.

So IPsoft stresses to its enterprise customers that it"s essential that humans stay involved with the process and make it easy to disengage Amelia when a customer should be rerouted to a human agent. It also uses sentiment analysis to track how the system is doing. Once it becomes clear that the customer"s mood is deteriorating, a real person can step in.

Training a cognitive agent for enterprise applications is far different than, say, Google training an algorithm to play Go. When Google"s AI makes a mistake, it only loses a game, but when an enterprise application screws up, you can lose a customer.

4. Prepare Your Culture For AI As You Would For Any Major Shift

There are certain things robots will never do. They will never strike out in a little league game. They will never have their heart broken or get married and raise a family. That means that they will never be able to relate to humans as humans do. So you can"t simply inject AI into your organizational culture and expect a successful integration.

"Integration with organizational culture as well as appetite for change and mindset are major factors in how successful an AI program will be. The drive has to come from the top and permeate through the ranks," says Edwin Van Bommel, Chief Cognitive Officer at IPsoft.

In many ways, the shift to cognitive is much like a merger or acquisition -- which are notoriously prone to failure. What may look good on paper rarely pans out when humans get involved, because we have all sorts of biases and preferences that don"t fit into neat little strategic boxes.

The one constant in the history of technology is that the future is always more human. So if you expect to cognitive applications simply to reduce labor, you will likely be disappointed. However, if you want to leverage and empower the capabilities of your organization, then the cognitive future may be very bright for you.

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