The Need to Heed the Web
by Dana Blankenhorn
Thursday, September 16, 1999

IBA thanks Intellectual Capital.com for permission to include Dana Blankenhorn's column. 

Over the next few months, politicians will offer many positions concerning the Internet. 

As we will detail at the VoxCap.com (IC's sister site) many Internet issues are worth addressing. Encryption, privacy, mandated use of filtering software, the banning of hate speech, gambling and pornography -- all these (and more) are worthy subjects for debate. There are also a host of new Internet millionaires and billionaires to solicit for campaign contributions, a sure incentive to spirited political discourse.


One thing that will likely be absent, however, will be any clue as to the lessons of the Internet and how they might be applied to existing policy issues. Candidates are not asking what the Internet can do, in other words, just what they should do to the Internet.

 We can use the Internet to improve our lives
We can use the Internet
to improve our lives
The fact is, the Internet is just beginning to affect our society, and in unexpected ways. We can use these lessons to improve our lives, or we can ignore these lessons and miss opportunities.


The new assembly line


Let's start with the example of our most intractable political issue: education.


U.S. education quality today is an inverted Bell curve. We are great at kindergarten through third grade, and our colleges are the best in the world. Between the extremes we are terrible, and the test scores prove it. Middle-school and high-school students are warehoused in huge compounds where they have some of the rights of prisoners "for their own protection."

These schools -- call them education factories -- were built for sound industrial reasons. A big building can efficiently share functions -- there is one gym for 3,000 children, one principal, one cafeteria and one insurance risk. With 3,000 children clustered together, you also can hire teachers for unusual subjects like Russian and the oboe.


This was logical in Henry Ford's time. It is not logical in Michael Dell's.
 

Dell's computer factory is an example of "mass customization." There is one production line, but each unit is made to a customer's exact specifications. This is made possible by networked computers that can pull orders off the Web, order parts for just-in-time delivery, instruct the workers on exactly what parts or software the customer requires, and organize the whole enterprise with minimal human intervention.

Schools can do the same thing. The Internet brings all the world's knowledge to every desktop. Networked software lets teachers know students' exact capabilities (and problems). Distance learning lets schools share the cost of teaching unusual disciplines. The curriculum can be customized for everyone and adapted to each student's specific learning style.


Unfortunately, all we will hear on the subject of education are one-size-fits-all, "top down" approaches. Whether it is a call for discipline, or phonics, for changes in curricula, or for local control of each pyramid, it is all about re-ordering the factory school, not starting from scratch based on what we know works. There are reformers who know the truth and how to implement "Dell" schools, but they are not being heard.


Smart cards ... and people

The same thing applies to health care. You will hear some speeches about programs, about moving money around or changing priorities. You will not hear much about applying the lessons of the Internet to the problem.


The day-to-day problems of health care are system-integration problems. The databases of hospitals, pharmacies and insurance carriers are incompatible, resulting in adsurd administrative waste. Every time you see a new doctor, you fill out a new form. It is worse in the doctor's back room, still worse in the hospital, and when insurance companies get garbage in, it is going to be garbage out.


There is also no universal method for accessing medical databases. What we need are standards, imposed from above, and a way for you to carry necessary security and important records with you.


We need smart cards for universal access and a team run by a veteran computer-industry executive such as H. Ross Perot or IBM Chairman Lou Gerstner to integrate the databases. Instead of demanding that insurance companies cover specific procedures or face lawsuits, we should demand that they integrate their databases. This would save 10% to 20% on the national health-care budget, and have a starting point for the real debate.


The key to campaign and governance success


Finally, there is the art of political campaigning itself. The buzzword permission marketing can cut through all the crap.


Permission marketing uses databases to develop personal relationships. Instead of treating people as markets or subgroups, permission marketing treats them as individuals.


It is not about getting permission to "spam" people, bombarding them with e-mail messages as you would bombard them with 30-second spots. It turns strangers into friends and friends into customers by learning their individual concerns and having that information at hand when anyone calls on them.


The idea is to steadily increase the level of permission you have with each individual. The ultimate permission is that given your power company. You are buying its product now.


The first step is getting permission to market. Most private companies do this with coupons and contest entries, but affinity marketing works, too. Of course, that is just a first step. You cannot just have a list. The list must be a database. You then must use that database correctly, never over-stepping your permission to raise money or sell merchandise.


Before you start worrying about candidate databases as a threat to liberty, please remember the key to permission marketing. Permission belongs to the customer, it can be withheld, it must be renewed, and the best permission marketers always pay people for their attention, with free samples, contest entries and other premiums.


With networked computers, knowing people and communicating with friends never has been easier. The first candidate to take this lesson from the Internet and apply it to his campaign probably will win, definitely will deserve to win and will have an incredible tool for governing well.


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