It’s Not Just About Information, It’s What You Do With It

One thing is evident. Information is the largest, most precious resource available to present-day human society. Thanks to it, we can now pinpoint exactly what the interests, preferences and lifestyles of any group are. And these groups may be ethnic, racial, cultural, age-defined-gender-determined-politically-affiliated… My head hurts just thinking about the degree of classification that is now possible: “The Garden of Eden of Efficient Targeting.”

This is not surprising, since we as humans continue to evolve at an ever faster pace. Feats of human performance at its best, as recently as the 1908 Olympic record for the marathon, are now habitually beaten by more than 20 minutes by your average high school athlete. But what humans are developing are not “super legs”, as with Gladstone’s evolutionary blunder, not enough time has elapsed for the physical capacity of the human body to transform in that way.

The “super legs” come from the constant study and observation by experts and the copious amounts of data they share with the trainers and the athletes, who then, produce more information. This information leads to more efficient and targeted training and subsequently, to more and more records being broken.

As Geoff Colvin presents in the first chapter of Talent Is Overrated, this is a common model for corporations as well: To keep their performance improving. However, this is an interesting phenomenon in-and-of itself because, for many companies like Google, the path to great performance is based on the capabilities of the people who make up the company or, human capital.

Other business models from an earlier age like PepsiCo or Exxon Mobil are less effective at creating shareholder wealth because they rely more on financial capital.

Let’s consider the most extreme case, Exxon Mobil, the largest company in the world. Its business invests about $20 billion a year, the largest investment program of any company in the world. Its return to shareholders is roughly $33 billion a year through dividends and stock buybacks. A much less impressive ratio of ROI than the $124 billion on Google’s initial $5 billion investment.

When Rex Tillerson, president of Exxon Mobil was asked why follow this model, he stated the issue as being one about people. “You don’t just walk out on the street and hire an Exxon Mobil engineer or geoscientist or researcher.” The scarce resource today for companies that follow this model seems to be human ability.

So, there is a tremendous need for great performance by individuals on the part of corporations. Nonetheless, information also tells us that there is a disturbing trend happening. A large portion of potential employees and consumers are following a path that will render them less able to perform at a high level in any corporation and subsequently to purchase the goods that these corporations are trying to market to them.

According to surveys, 41% of Mexican immigrants between 16 and 19, or the fastest-growing major immigrant group in New York alone, are dropping out of high school. No other major immigrant group surpasses 20% drop out rate.

The reasons for this trend continue to be explored and include aspects of cultural makeup, immigration, economic status, social pressure, etc.

But wait! Where is the marketing angle to all this?

Well, it would seem that if the future of a large portion of individuals in the golden age of purchasing power is potentially being jeopardized by arrested education, then marketers and corporations would benefit from studying the issues leading to this phenomenon and address them with the effectiveness that all the hyper-targeted information available about this group affords them. What do you think?

Courtesy of MediaPost, written by Juan Aceves.