FRAMEWORK : Social Mission

Apply Financial Services Analytical Modeling Process to Help Government Solve Social Problems

Would you like to see our public policymakers use “data science to create social good?”

Three Harvard Business Review authors (Kleinberg, Ludwig, Mullainathan) create “A Guide to Solving Social Problems with Machine Learning” to provide direction. In dealing with trepidation about machine learning, they ask: “How can we maximize the benefits while minimizing the harm?”

To test their concept, the authors applied machine learning to a “dataset of over one million bond court hearings.” As successful as their predictive model was in reducing risk and preventing crime, they still puzzled over what they see as the limiting nature of outcomes.

It’s here – in a broader understanding of outcomes – where there is an opportunity to be even more expansive:

  • Preventing further threats to the community
  • Optimizing costs for courts
  • Fairer criminal justice decisions
  • Enhancing chances of improved behavior

Outcomes like these that would improve public policy need to be identified, and then models constructed to predict those various outcomes. Because you must determine what outcome you’re looking to predict—and that outcome must be distinct—it’s our methodology to use a series of models.

The process of defining a model’s objective function – finding drivers to meet the objectives, identifying variables, finding data sources, building and choosing methodology, etc. – is a process that can be applied to any industry, government included.

In lending, for example, a risk model predicts risk; a response model, response; a performance model, performance, etc. Accordingly, in the public policy instance of bail, you can create multiple models for preventing threats to the community, optimizing court costs, fairer decisions, improved behavior, etc.

The authors find it “hard to imagine moving to a world in which algorithms actually make the decisions.” Rather, the authors expect algorithms to be used as “decision aids.”

This is exactly the framework that we in the financial services decision management community have been using for years. Applying data science to public policy will take our art-and-science discipline for reaching the best outcomes to help guide policymakers toward their best decisions.

For using machine learning to create public policy that treats social problems, we should indeed, as the authors advise, “pair caution with hope.” We also should partner with data experts with years of data analytics process, experience and success to help us find our way.

FRAMEWORK : Social Mission

Harness the Power of Business to Help Society

In her Be the Change Media article “Why Poverty and Inequality Are Bad for Business” Jessica King cites Nick Hanauer’s TED Talk saying that “the model for rich folks should be Henry Ford.”

Ford, of course, made history with his $5-a-day wage that “converted auto workers into people who could afford the product they made.” King firmly believes that “we have no choice but to harness the power of business to address society’s greatest challenges,” including poverty and inequality.

How do we “harness this power”? As business leaders, we can take several approaches to leverage business’s energy and resources.

One approach taken by the Israel Venture Network is to integrate business acumen, economic development tools and financing with their unique Social Business Program – which enables “social ventures to become self-sustaining and transform into income-generating, social enterprises.” From unemployed people with disabilities to under-employed minorities in poverty, IVN’s Social Business program is putting people to work and bridging the “gap between traditional nonprofit organizations and traditional for profit businesses.”

In our small business, the flexibility to engage such Social Business programs exists – and we have engaged one of these social ventures for more than a year. The learning exchanges and the exposure to diverse thought processes and people has broadened this venture’s teams’ experiences way beyond their day-to-day work.

In addition to traditional businesses and social enterprises, philanthropy and global business are partnering to address inequality and poverty.

George Soros recently announced a partnership with MasterCard to form Humanity Ventures. He explains: “Our potential investment in this social enterprise, coupled with MasterCard’s ability to create products that serve vulnerable communities, can show how private capital can play a constructive role in solving social problems.” Again, the long-term goal is to foster local economic development and entrepreneurship – creating sustainable businesses that employ vulnerable populations.

For-profit, non-profit, social businesses and philanthropy – all together – can harness considerable power to solve societal problems, help people build a way out of poverty, foster greater understanding across segments of our population, and temper the inequality that threatens our society.

FRAMEWORK : Social Mission

“Experience is one thing you can’t get for nothing.”

Everyone loves a listicle, and Olivia Khalili’s “Why Your Company Should Have A Social Mission” from Cause Capitalism, is an especially good and scannable one.

To illustrate her argument that “doing good is a business strategy…businesses with a strong social mission have a competitive advantage,” Khalili lists twenty-two reasons.

Let’s focus on her second major point: “Your company (1, 5, or 200 employees) is the ideal size to run a purpose-driven business.” She believes that a social mission is a competitive advantage that “smaller companies can better leverage.”

A small purpose-driven business must be built on a base of guiding principles and people. At this scale, you will be empowered, agile and flexible enough to manage integrating your passion and your belief system in all aspects of your work.

A perfect example of this empowerment and agility is identifying and partnering with experts who blend vast experience, industry and field know-how, and entrepreneurship. If your belief system values expertise, you’ll find experts that come in all types, shapes, sizes – and ages.

Experts on their “second journeys” often bring wisdom. By the dictionary, ‘wisdom’ calls for experience, knowledge and good judgement. Moreover, these experts bring decades of perspective and context. There’s a lot to be said for “been there, done that” when it comes to doing business in our contemporary world of new tools, methods and technology.

To my mind, a ‘future-bound’ company represents a philosophy, a culture, an experience; the talent you choose to build your business embodies your belief system and guiding principles as it empowers your social mission.

As Oscar Wilde said: “Experience is one thing you can’t get for nothing.”

Leverage your size: combine a few wise experts with new methods, technologies and tools for creating relevant, forward-reaching solutions in your purpose-driven business.

FRAMEWORK : Social Mission

Leverage Data Capabilities to Advance Social Good

Information inequality is certainly nothing new.

In the 15th century the Guttenberg Press spawned an exponential rise in mass communications, yet inequality remained. Today, even with the supposed “democratization” provided by the global Internet, Shamina Singh believes we now face a “growing data divide.”

In her article “A Call to Action on Data Philanthropy,” she observes that “a chasm exists between those working to solve society’s toughest problems and those with the know-how and assets to unlock big data’s potential.”

What I find most compelling here is her idea of “data philanthropy” – “where companies leverage their data capabilities to advance social good.”

Between the dual challenges of data access and data know-how, the bigger challenge is the ability to use data. What is needed is people with the expertise and the data analytic capabilities to know about the data, to access the data, and to provide insights to “advance social good.”

In today’s landscape, major corporations – like MasterCard’s Center for Inclusive Growth, or initiatives by Google, Amazon, Microsoft, etc. – are one prong of the data philanthropy effort. A second prong is grassroots movements like Code for America who are on a “mission to make government work in the digital age.” A third prong is academia, as university programs, faculty and students combine to leverage their data expertise and reach.

To come full circle, the ability to use data is the critical piece in any kind of data philanthropy. For example, DataKind understands that “the same algorithms and techniques that companies use to boost profits can be leveraged by mission-driven organizations to improve the world” as they pair data analytic experts with social mission organizations.

In the spirit of Shamina Singh’s call for data philanthropy to leverage data skills in bridging the growing data divide, DataKind’s mantra says it very simply:

“…use data not only to make better decisions about what kind of movie we want to see, but what kind of world we want to see.”

FRAMEWORK : Social Mission

Giving Back Can Help Your Business Grow

When Jacqueline Whitmore, a busy entrepreneur and author, certified her adopted Yellow Lab as a Therapy Dog, she began taking time from her schedule to do volunteer work at the local library.

“Over time, my volunteer work paid off, both personally and professionally, she writes in “5 Ways Volunteering Helps You Do Well While Doing Good.” Her article takes a quick look at a “few ways giving back can help grow your business.”

  • Opportunities to network
  • Build your portfolio
  • Good publicity
  • Boost reputation
  • Take your mind off work

Whereas the article’s focus is on the individual, at Tal Solutions, I have taken a unique approach to giving back—through identifying ways to focus and use my professional skills and network on solving societal problems.

Think about your network, your skills and your passions, and then envision ways you can connect them with colleagues and organizations – and collaborate while having fun while impacting social issues. This is one aspect of what we are currently doing in our Decision Management Community.

Whitmore concludes with a personal growth benefit: “Most of all, volunteering encourages you to focus on others and less on yourself.” Not only can you act as an individual; you can also give back as a group of like-minded people creating a platform for social impact and focusing on others.