To paraphrase the Rev. Martin Luther King, Jr.: The ultimate measure of an organization is not where it stands in moments of comfort and convenience, but where it stands at times of challenge and change.
As we look to the future of business transformation in what promises to be a turbulent new decade of technology, cultural and macroeconomic disruption, Kings sentiment is more relevant today than ever.
King's moral leadership changed the culture and the culture changed us. In the world of business, there's a connection in the recent announcement byGoldman SachsCEO David Solomon that his investment bank would help companies go public only if they had at least one "diverse" board member. Solomon's announcement is significant not just because it was the right thing to do, but because it recognized diversity as an opportunity to keep the market moving forward.
Turns out, for example, the performance of public offerings of U.S. companies with at least one female director has been "significantly better" in the last four years than those without gender diversity, according to Solomon.
The arc of progress in business is long but it bends toward diversity and inclusion. When it comes to bridging the gender and racial equity gap, it's about investing and creating sustainable wealth that can be passed down to future generations. Much of that wealth will be driven by the digital revolution. The problem is, diversity and inclusion in the tech industry is moving at glacial speed.
If we want to get the most out of the digital revolution, if we want to make sure technology benefits us all, we must expand the talent pool driving the digital transformation trend. Conversations with several notable visionaries in our 2019 Digital Masters blog revealed the following five key trends.
When AI expert and best-selling author Avi Goldfarb talks about the astonishing evolution of artificial intelligence, he talks about how the technology has revolutionized the decision-making process and how in the last decade machines have gotten so much better at making predictions, reducing uncertainty and filling in missing information.
"We wanted to get our heads around what this exciting new technology (AI) means," says Goldfarb, "so, we put our economist framework on it."
"And once we realized that it was all about prediction, we could re-frame the importance of the technology as a drop in the cost of making better, faster, cheaper predictions. And once you understand that, you start to see all of the consequences."- Avi Goldfarb
In business, there's lots of uncertainty, says Goldfarb. There are lots of decisions that you make that are fundamentally compromises, because you don't really know what's going to happen. He argues that there are all sorts of things that companies do to deal with this uncertainty. For example, they hedge and play it safe.
"But if you can make good predictions about what will happen in the future," says Goldfarb, "then you can make much better decisions. Some see this as an opportunity to save costs. I don't want to say that the idea of saving labor costs is wrong. As smart technology diffuses, you're going to have machines do things that people use to do. But in the process, you're also going to create a whole new set of opportunities to improve organizational processes and also serve customers better."
"There continues to be a lot of anxiety around the future of work," says Goldfarb."But jobs aren't the issue so much as economic equality and inequality (is)."Today, we have more leisure time. We have 40-hour work weeks. We stay in school longer, and don't start work until much later. We get to retire. We get vacation. And it's hard to think of any of that as bad. So, the point is not: Are we going to have jobs? The point is: Are those jobs going to be good jobs? And are the benefits of AI going to be distributed in a way that people think is fair and just? And that's a much harder question."
It's hard to say with any kind of certainty what the digital environment will be like 10 years from now. Will most work be automated? And if that happens, what will we do about workforce disruption? All of which just scratches the surface of factors that will shape the agenda around automation in the long-term.
"I'm not expecting to see much in terms of new technologies," says Neil Ward-Dutton (@neilwd), VP, AI and Intelligent Process Automation, European Practices, IDC. "But I'm expecting to see new developments in the maturing of existing technologies. So, we're going to see more in terms of interoperability and tech convergence in driving intelligent automation." And this includes RPA and case management, says Ward-Dutton, who is also one of Europe's most experienced and high-profile strategic technology advisors and industry analysts.
"I think we're going to see more situations where these technologies are working together," says Ward-Dutton. "I think we're also going to see more focus on the packaging of technology and management tools and reporting and analytics tools as well. The big challenge is how do we get an end-to-end view of how all of this automation is working together in a way that's integrated? We'll see much more focus on this tech integration challenge in the years ahead."
Harvard Professor Stefan Thomke is author of Experimentation Works: The Surprising Power of Business Experiments. Thomke believes that experimentation will drive innovation now and in the future and that the cost of not experimenting puts businesses at a competitive disadvantage. The future, he says, belongs to organizations that rely on virtual, data-driven experiments far more than experience and gut instincts alone. He says that the old school, "best guess" approach to innovation won't cut it anymore. The most successful organizations, he says, are already conducting numerous digital, controlled experiments that can engage millions of users faster than anyone ever imagined.
"What many of these organizations have discovered," says Thomke, "is that an experiment-with-everything' approach to innovation offers a bigger payoff and a considerable competitive advantage." The question is: What can you do to help your organization take advantage of the experimentation trend?
The best place to start is to create an experimentation organization' that masters the science of testing and puts the discipline of experimentation at the center of the innovation process.
"In the past," says Thomke, "a company could take years to develop a game-changing capability. But digital leaders can now do it by combining the speed and power of custom software with the rigor of controlled experiments. Whether it's improving customer experiences, trying out new business models, or developing new products and services, even the most experienced managers are wrong (more than not), whether they like it or not."
Thomke says that the big question is, how will we bring technologies together and how will that change the way companies do business?
"The tech trends we're seeing right now including AI, big data, digital platforms and the ability to reach customers more rapidly than ever before will elevate the importance of experimentation even more."
Forget the hype about planet overpopulation. We're actually running out of people faster than we can replace them. So say the authors of Empty Planet, a new book by Canadian thought leader Darrell Bricker [@darrellbricker] and journalist John Ibbitson [@JohnIbbitson].
There are over one million fewer children living in the U.S. today than at the start of the decade. On top of that, Americans are having fewer children and waiting longer to have them. The same is true of the global population as well. Bottom line: If this demographic trend continues, businesses are in for a shock.
Research shows that by 2034, adults 65 and older will outnumber children for the first time in U.S. history. Which represents a huge opportunity for businesses that choose to focus on building technology that supports longevity, quality of life, independence and connection for older consumers. In other words, the aging population is the growth market of the future.
The second thing we're going to have to deal with, says Bricker, is an economy that will no longer be driven by the consumption patterns of the past. The population is getting older and aging consumers don't consume the same way younger consumers do. Which means now is probably a good time to adjust your business model to this new reality.
"So, when we think about technology, why are we always thinking about building technology for young people? Why aren't we thinking about building it for older people?"
- Darrell Bricker
"They (older consumers) are prepared to pay for it and they want to live independently for as long as possible. So what are we building, in terms of technology, to facilitate that?"
Conventional wisdom says that technology drives digital disruption. But in the majority of cases, disruption is fueled by the decoupling of specific activities in the customer value chain. So saysHarvard Business School Professor Thales Teixeira [@ThalesHBS]. In the future, says Teixeira, this "decoupling" phenomenon will drive more disruption than we've ever seen before.
The customer value chain includes all of the activities organizations do to satisfy customer needs and expectations. "In the past, says Teixeira, "companies controlled value chain activities. But disruptors are increasingly attacking specific areas of the customer experience. What I see consumers doing is trying to reduce costs for themselves. And I'm not just talking about the monetary costs of buying things. I'm talking about money, time and effort. These are the three currencies that we as individuals have in our pockets. So, whenever a disruptor comes along and says I can make it faster, less expensive and easier for you to get this product or service, people will naturally gravitate towards that disruptor."
Teixeira says that sometimes disruptors use technology. But what they're really doing is focusing on improving a specific activity in the customer value chain. And that's how market transformation starts.
What it all comes down to is this. It's tempting to prognosticate about the future. But much better to evaluate how trends will impact people, culture and the environment instead.
To paraphrase a line from Dr. King's "Where Do We Go From Here speech:
"The road ahead will not always be smooth. There will be inevitable setbacks. And there will be those moments when hope will turn into despair. But we must walk on into the decade ahead with an audacious faith in the future."
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