Turning convention on its head

By the 1980s almost every airline around the world was using technology to manage their customers and meet their increasing security obligations.  These were the same foundations they also needed for a frequent flyer or miles programme, yet it took years to properly evolve pricing based on yield management, reward points and to create programmes that have ultimately become more profitable and important than the core business of flying planes.  If all the elements were there already there, why couldn’t someone bring it all together?

Similarly, I recently had to sign some documents to open a new bank account.  Except that it was a digital signature associated with digital documents.  In an age of cloud computing, why are we even talking about documents with terms and conditions, which I will never read, and a one-off confirmation combined with and old-fashioned form of signature-based identification?  We know there are better ways of confirming understanding and agreement.

The airlines couldn’t see past the plane tickets of they’d grown-up just as we struggle to look past contracts and pen-based signatures that we’ve known our whole lives.

But the case for change is strong and the businesses that get this will win in the world to come.  Already companies are realising that if they can co-locate in the cloud with their suppliers or customers, they can share information in real-time.  What’s more, parties can pay each other incrementally as value earned, often as a subscription which is one of the most important business models changes of the last few years.

Perhaps the day is coming when the Internet-connected smart fridge in our kitchen will be stocked directly by suppliers who pay us for the privilege, with our fridge making payment on our behalf only when, and for what, we choose to consume!  We might even pay supermarkets a subscription based on their analysis of an “all you can eat” budget.

It isn’t just about the idea, the public and technology must be ready too.  We could let our fridge and suppliers choose our food for us, but we’re probably not ready.  Just as we weren’t ready for SixDegrees.com which pioneered social media even before Myspace and long before Facebook.  And we certainly weren’t ready when Clive Sinclair launched his C5 electric car way back in the 1980s before a worldwide interest in making the move from fossil fuels.

Readiness is incremental but history is often written as a series of events and inventions.  We’re told the steam engine was invented in 1786, the internal combustion engine in 1858 and the electric light in 1879.  Of course, these ideas did not appear out of nowhere and cannot be credited to any one person such as James Watt or Thomas Edison.  These technologies have all had long gestations and evolved from hundreds of small innovations that have emerged over many years or even centuries.

What’s more, the popular view that technology grows exponentially is equally flawed.  We’re told that the world is moving faster than ever before, and that we can extrapolate everything from the electric car to artificial intelligence to a singularity in the near future when humans will be redundant.  While these views get media headlines, they are based on a premise of exponentials which is deeply flawed.

The water wheel was the revolution ahead of steam and was arguably the exponential technology of the seventeenth and eighteenth centuries.  But if all technology was exponential then, after several centuries, we would expect to see today’s rockets powered by water wheels!

That might be a bit silly, but what about steam, the exponential technology of the 19th century?

Nineteenth century engineers and writers couldn’t help but be convinced of the exponential nature of the steam engine.  Inventor Zadoc Dederick even went so far in 1868 as to prototype and patent a steam-powered robot inspiring science fictional writers to even add steam-driven artificial intelligence!

We may laugh, but we are no smarter, it is just as hard for us to understand where today’s exponentials such as silicon, data and artificial intelligence move from rapid, dare I say exponential, growth to slowing like the top of an “s-curve”.

Like the top of the water wheel or steam curves, pick that top and, even more importantly, sense the emergence of whatever comes next, and you’ll create the unicorns or even the trillion-dollar companies of the 2030s and 2040s.

Technology, and its evolution, is meaningless without people.  Just like we see inventions as popping out of the ether full formed, so we look for our future talent, our people to do the same!  That means we are constantly guilty of looking at CVs as a set of facts rather than their own capability curves.

Education is the genuine silver bullet for the advancement of society and solving of social ills.  It is one of the most productive investments that anyone and any society can make.  But when we fall into the trap of assuming it is all about the content and little about the timing then we condemn our people to live their own s-curve.

Perhaps we do this because we’re stuck in a model of society that is now outdated.  The world used to be made up of three classes: the doers (blue collar, factory, and agricultural workers), the managers (white collar, administrators) and the rulers (the elites).  In that world, which was relatively static, up-front education was followed by long-run careers in one occupation.

Those days have gone.  Today there are three new classes of worker who are emerging, and our education system needs to adapt.

There are those that work for the machine (such as delivery drivers who receive their schedule from AI), those who work with the machines (such as doctors and nurses who receive clinical advice from AI colleagues) and those that work on the machines (such as engineers and programmers).

What’s particularly exciting is that not only are more jobs emerging than the technology is taking away, but in every sector, those jobs are moving up the value chain from working for the machines all the way through to working on the machines.

It used to be that call centre workers were amongst the first generation to feel like they worked “for the machine”.  That is, they were constantly barraged with calls, scheduled in 30 second increments by machines designed to optimise their output.

Today, we are increasingly digitising and automating the customer experience, but we need humans to intervene where the machine can’t cope.  In fact, we need those humans to teach the machine.  This is a form of programming, but increasingly it is “no code” programming and it is the domain of those same staff who used to work for the machines in batteries of cubicles.

To make this work, we can’t assume what we were taught as a 20-year-old is going to be current at 50.  So, we need to move to a model of constant learning.  But rather than adding more years of education, perhaps we need to spread it out more.

Our research at Deloitte has shown that you are at your most employable three years after receiving your qualification.  And it doesn’t seem to matter whether that was associated with a trade, such as welding, or a profession such as engineering.  For many people this is at around the age of 23.

Rather than being ageist, it seems that many bosses are simply discounting skills if they’ve not been refreshed.  On the other hand, if we can convince people to update or take on a new qualification every decade, and if we can find a way to do it without disrupting their lives, they can be 23 again at 33, 43 and 53!

The great thing about constantly refreshing our skills is that not only do we keep up with changes, but we also naturally network and understand emerging business models.

As much as we’d all love to invent the next big thing, it is far more likely that our success will come from understanding the trends and moving early and often.

That means CFOs adopting digital reporting, COOs building supply chain partnerships based on shared data rather than procured contracts and general managers seeking to add new value rather than increasing the price for their customers.

For all of us, we know there will be change but we need to reassure each other that somewhere, in amongst disruption, are our own frequent flyer opportunities if only we have the confidence to look.