In my previous post, I talked about the status of Big Data.  In this post, I’d like to discuss some of the ethical issues we’re facing in the data world.

We are at an interesting crossroads between data and culture.  Today, we have the ability to collect and analyze large amounts of data (much of it from social media) but our increased use of data is changing how we view concepts such as privacy and confidentiality.  In light of the NSA Surveillance debate and a recent thought experiment from Facebook, people are beginning to question the boundaries between acceptable and not acceptable use of personal data.

This is more of a question of ethics than anything else, but it will likely become an integral aspect of how companies engage consumers and define their brand and image. In this new environment, some of the challenges businesses and consumers face include:

1. The nature of private vs. public information: What does privacy actually consist of when we are all connected through social networks?
2. The confidentiality vs. profitability of information: Is data kept “in-house” or is it sold for use by other businesses?
3. The use of analytics to serve the customer vs. “manipulate” the customer: Are analytics used to better understand customer preferences or to subtly sway the customer and restrict their choices?

It doesn’t take long to realize that there is a fine line that separates these areas.  In many cases, the distinction is blurred and hashing out the details will require a broader social conversation that weighs the costs (in terms of privacy) with the benefits (in terms of improved customer service) of our growing reliance on analytics.  On the one hand, there is uncertainty surrounding how our data and information is used, while on the other hand, we gain the ability to more precisely fulfill consumer needs and even improve more fundamental factors such as the safety and reliability of the products we purchase.

These are key questions organizations need to ask, especially with regard to how they define their mission to customers.  They also have implications for how an organization is perceived publicly and the type of culture they embrace internally (see Chris Cancialosi’s article on establishing a Leadership Brand).  When launching a new data-driven initiative (whether Big Data or conventional), there are several questions to consider:

1. Could it cause significant distress to a customer by revealing potentially embarrassing or unwanted information?
2. Are you trying to understand a customer or strongly steer their behavior?  Does it sound eerily similar to something out of 1984 or Brave New World?
3. How secure is the data from potential hackers?  What are the associated risks?
4. What is the problem this initiative will solve?  What is the method to acquire the data, and how is it better than other options?

These are complicated questions that won’t be answered any time soon and there are a number of different perspectives on what needs to happen (see here, here, and here for some examples).  At the end of the day, the key question is one of tolerance: how much “privacy” are consumers willing to give up for the benefits data provides (see my post for an example of this trade-off)?  This will be different for each person, so it is important for consumers and organizations to become educated in understanding how data is used, weigh the costs and the benefits, and make informed choices.