We live in an era of incredible possibility. Technology is improving exponentially and things that seemed impossible just a decade ago are now within our grasp.
Six powerful and complementary technologies—AI, IoT, 5G, AR, Blockchain, and autonomous machines—are ramping into the marketplace simultaneously. Individually, each technology would be a significant disruptor. Combined, they represent an unprecedented leap forward in technological capability and present extraordinary opportunity for every business. Organizations will combine these technologies to create new products and services, build new channels, automate operations, make higher-quality decisions, improve customer service, improve working conditions, cut costs, and solve major human challenges.
In a world of possibility, options are plentiful, and choices can be overwhelming. Strategic clarity is necessary to keep organizations focused and avoid distraction. When technology enables organizations to do so much, choosing what not to do becomes the overriding challenge.
Powerful new technologies bring rapid change to markets, industries, companies, and people. Change is disorienting and exhausting. To stand with you through inevitable tumult, employees need a north star to guide them, clear marching orders to align them, and an inspiring purpose that gives them the strength to endure. Strategic clarity and organizational alignment are vital if you are to navigate rapid change.
Clarity comes from an organization's well-articulated, inspiring human purpose. To successfully navigate the next decade, businesses must map the landscape of possibility and then use the lens of purpose to plot their course. With a clearly stated purpose, it's easier to focus efforts and avoid projects that detract from the core mission of the company. Employees will embrace change if you motivate them with a compelling vision for the future that gives them a reason to contribute discretionary effort. The late nights and weekends, the extra attention to detail, the extra push for results—these are all a function of discretionary effort, which is unlocked by giving people a reason to come to work that goes beyond a paycheck. Unless their compensation is directly and meaningfully linked to corporate profits, employees don't really care about quarterly results and delighting shareholders. They want to enjoy challenging work in a respectful workplace and successfully execute against a mission they consider worthwhile. Never underestimate the power of a corporate purpose that resonates strongly with employees.
As my friend Brian David Johnson taught me many years ago, when it comes to thinking about the future, there are two important questions that we need to ask and answer:
To answer these two questions, organizations need to be crystal clear on their purpose, have a bold vision for the future, and have a mission that people believe in. Strategies will be found at the intersection of possibility and purpose.
It is leadership's job to ensure that everyone in the organization is crystal clear on the purpose, vision, mission, values, and strategies of the company. Invest more time in this than you think is warranted and you'll probably still not communicate these enough. Wordy, uninspiring vision and mission statements that are written by committee are worthless. Short, memorable statements, consistently and regularly shared with employees, make all the difference.
Be bold, be clear, and stay focused. Align, inspire, and motivate your teams to use these six technologies to change the world, in ways big and small.
Strong innovation plans focus on improving people's lives, specifically the lives of customers and employees. Evidence clearly shows that when their lives are improved, so are corporate results. Companies that focus on customers and employees automatically serve the interests of shareholders.
Here are six ways that the technologies described in this book can be used to improve people's lives.
Every person on earth has a unique story, a unique life experience, and a unique way of looking at the world. On a crowded planet, where people can feel like a tiny cog in a giant machine, people cling to that sense of individual identity more than ever. They want brands to honor and celebrate their uniqueness, and treat them as valued individuals. Use technology to learn about customers, to let customers express themselves, to build customized products and services, to deliver personalized experiences, to communicate with customers in the way they wish to be communicated with, and to reward customer loyalty in the way they want it rewarded.
Life is a blur. People are busy. Getting through the day feels like survival. Brands that respect how precious a customer's time has become will be rewarded. Strive to remove friction from every interaction. Shorten communications by personalizing them—no need to tell everyone everything, just what each person needs to know right now. Pursue frictionless experiences, knowing this job may never be done. Shave seconds off transaction times. Find ways to save people both time and cognitive effort, because extra thoughts take extra time. Caveat: Save people from meaningless friction, but don't be afraid to add in meaningful friction. Sometimes we need to stop and appreciate the moment, understand the significance and consequence of an action, or just step away for a minute of reflection. As the great Ferris Bueller once said, “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.”
Humans have a set of shared aspirations that cross cultures and generations. We want to feel connected to each other (to family, friends, and colleagues). We want to learn and grow throughout our lives. We want to get things done and feel a sense of accomplishment. We want to be entertained (at appropriate times). We want to express ourselves creatively. We want to stay well, and we want the people we care about to stay well. These six aspirations—connection, learning, accomplishment, entertainment, creative expression, and wellness—are consistent human needs. These are the ways that people create meaning in their lives. They are also how people create a sense of identity. It's how we establish our place in the world. Ultimately, people buy products and services to create meaning in their lives and to reinforce identity. When a teenager buys a new smartphone, the brand and color reflect their identity. The product is a gateway to creativity, self-expression, connection, entertainment, learning, accomplishment, and personal wellness.
Use technology to aim higher. Help people to build a stronger sense of self by offering customized offerings and personalized experiences. Help people to create more meaning in their lives. For example, a cloud-connected photo frame connects grandparents to grandchildren halfway around the world, a provenance chain connects an environmentally concerned buyer to the fair-trade, sustainable origin stories of their purchases, and an AI diet coach helps people feel the accomplishment of hitting their weight-loss goals.
Automate and semi-automate business processes and implement data-driven decision-making to boost operational efficiency, speed service, reduce operational costs, and make your business more responsive to customer needs. Invest cost savings in future innovation, give some back to shareholders, and pass some on to customers as price reductions to stoke delight and fuel future growth.
Use technology to elevate your product offerings. Create more impact in people's lives by turning products and services into experiences and transformations. Create memorable moments throughout the customer experience. Research shows that if businesses deliver above-average service—memorable moments—just once somewhere along the way, and again at the very end of an experience, customer perception of that brand soars.
Use automation technologies—AI, robotics, Blockchains, and sensors—to free your workers from low-value, repetitive, and dangerous work. Provide them with the training they need to contribute to your organization at a higher level. Elevate their roles so they can perform more meaningful and rewarding work.
Now that you have a bold vision for the future and are excited about the possibilities that the six technologies in this book present, it's time to take action and lead your teams to discuss, formulate, and execute a fresh set of strategies. Here are some of the main strategic discussions you'll need to drive to determine next steps.
Automation will reshape every business in the 2020s. Artificial intelligence will automate tasks that involve prediction, optimization, vision, and diagnosis. Robots will automate routine physical tasks. Blockchain will automate transactions, contracts, and other exchanges of value, streamline collaboration, and automate away intermediaries.
Automation strategies should start with an automation philosophy. Decide which business goals you're optimizing for, and using the automation goal hierarchy, aim as high as you can.
Build your human-machine partnership strategy, a strategy to build high-functioning teams of people, AI, and robots working together. For every business process, determine which tasks are best done by AI, which are best done by robots, and which are best done by humans.
Develop a sensor strategy to get eyes on your business and build a digital model that exactly mirrors physical operations. Use sensors to detect key “business events” and manage the hand-off of tasks between AIs, robots, and humans. For example, a robot uses sensors to spot a spill on the factory floor and alerts a janitor, or an airport sensor detects a plane arriving at a gate, updates flight tracking systems, and alerts the gate staff to prepare for the arrival of passengers. Plot out all these business events and build a strategy to detect each one using sensors and AI. A sensor strategy is a key component of every automation strategy.
Use technology to augment your employees’ capabilities and elevate their work. Determine how collaborative AI, voice agents, cobots, and augmented reality platforms can provide assistance to different types of worker.
Build a collaborative AI strategy. Inspired by the way generative AI boosts the creativity and productivity of designers, find ways to use AI to augment and support the capabilities of every employee. Use AI to generate thousands of potential options and then narrow them down and present the best options to employees. AI augments the judgment and intuition of employees and helps them make better decisions, faster. Consider the role of natural language processing to support knowledge workers, summarizing, translating, or analyzing the sentiment of text.
Build a digital voice strategy. Decide where chatbots and personal assistants make sense in your organization. Consider chatbots for first-line customer support but also for employees. For example, voice assistants might make employee travel arrangements and schedule meetings. Plan with the expectation that voice platforms will evolve rapidly in the next several years, meaning their utility and relevance will only increase over time.
Consider ways to create hybrid workers that operate as a combination of digital intelligence, human experience, and human physicality. Pilot trials of AR workers, learn from their experiences, and be ready to embrace the technology the moment it matures.
Communication is a vital part of automation. Build a comprehensive employee communications strategy to support your automation projects and build an AI-oriented culture. Link automation to the mission and explain how machines will help everyone at the company to fulfill your corporate purpose. Involve employees in the development of AI that they will be working with. When they have a hand in its creation and understand its operation and limitations, they will more readily accept it as a co-worker. Be honest about the expected extent of automation or employees will be suspicious that they're next. Explain your philosophy on automation. Link the need for automation to the threat posed by competition and The Innovation Ultimatum. Position AI and robots as competitive allies and assistants that free workers from routine work so they can aim higher and achieve more. Be clear on the unique value that humans provide to the organization and explain what skills workers possess that make them “robot-proof.” Workers need to understand the limits of automation and to feel valued for the unique values they bring. History shows that looms get smashed when people feel their livelihoods are threatened. Communicate, communicate, communicate.
Build a modern culture of innovation. Educate employees on the exciting possibilities presented by technology. Buy them a copy of this book. Boost technology literacy at all levels of the company, from CEO on down. Familiarize employees with the exciting new possibilities presented by these six technologies Share success stories from early deployments to get employees excited about the future and to inspire ideation on new ways technology can automate processes and augment employee performance. Help employees to understand the Innovation Ultimatum, the imperative to innovate or fade away. Encourage them to imagine new products, new channels, new customer experiences, new employee experiences, and new ways to do business. Empower them to make plans that drive the business forward. Fund innovation. Allow employees to share in the financial results of automation adoption. Reward role models that take informed risks. Celebrate successful business transformation. Take time to honor the past but keep employees’ eyes firmly on the future.
Retrain all displaced employees, either to take on higher value roles within your organization or so they can thrive elsewhere. Upskilling may be cheaper than rehiring and onboarding. More importantly, remember that every one of your employees is watching how you treat workers displaced by automation. Invest heavily in those that are affected, even if you know that ultimately they will be leaving the organization. If you don't, you risk stoking a culture of fear in employees that remain. They will sabotage further change, become disengaged, and retard innovation efforts. Also, it's just the right thing to do.
Beyond the automation of value exchange, Blockchains have value to create digital provenance and to shape behaviors by aligning incentives. Be ready to add transparency to your supply chain. Origin stories will be demanded in many product categories, either by wary brands you supply, or by concerned consumers. Push your platform suppliers for supply chain management systems that use distributed ledger technology to ensure the provenance of your supplies. Set expectations with your suppliers that transparency and traceability demands are coming. Decide how you might use token economics to align incentives with business partners and other entities.
Consider opportunities to decentralize work where it makes sense. Use Blockchains to distribute value creation in an open source project that uses tokens to incentivize contributions. By distributing risk and reward, you may be able to get projects off the ground that would not otherwise find the funding and support they need for success.
PricewaterhouseCoopers predicts AI will create more jobs than it destroys. Most of these new jobs arise from the creation of new AI-based products and services and the increased demand they will create. Smart, connected products will deliver significantly more value than their dumb predecessors. Drive strategic discussions with your teams to discuss how each of the technologies listed in this book (not just AI) could take your product line to the next level. Specifically, determine how you will embrace personalization and customization throughout your product line. Determine how you will not just make your products frictionless to buy, but also frictionless to use. Hold strategic discussions on how to innovate and elevate your business model: use products to deliver services, services to create experiences, and experiences to create transformations. If necessary, create subdivisions chartered with building innovative services, experiences and transformations that are delivered around your core products. Discuss the strategic impact of one-hour, one-dollar local delivery and how that might signal the end of ownership for some products and shift customers toward a rental model.
Whoever has the best data wins. Leaders should drive specific strategic discussions around the data ultimatum: What data is needed to drive future innovation, and how do you get it? What sensors do you need to gather data? What data is needed to train artificial intelligence, now and in the future? What is your data-driven decision-making strategy? What data is needed to inform automated decision-making? How can you present data visually to support human-made decisions? What data already exists in company silos? How do you unify that data and make it available to those who need it? What data do you need to buy, and what partnerships are needed to get it? What data is needed to support product innovation efforts and to elevate your business model? What data do you need to support your personalization and customization efforts? What data can be monetized, and with whom? Do you need to evolve your data privacy policy? What's your data spiral strategy? How do you ensure the quality of data, and ensure it's available to those that need it? Crawford del Prete, president of global market intelligence company IDC, allowed me to include this great quote from him: “By 2021, data will no longer be viewed as “oil”, but as water. It is essential to life, but needs to be accessible and clean.”
This book focuses primarily on the positive potential of technology to do good in the world. But like any other tool, technology can be used both for good and bad. Most sci-fi literature is dystopian and entire shelves of bookstores are devoted to cyber-security. With this book, I wanted to offer a counterbalance to these negative narratives and paint a picture of the good that technology can do. That does not imply we should not be thoughtful and vigilant when deploying new technology. Security and safety are vital considerations for any innovation strategy. When defining the future that we want to build, we must also define the future we wish to avoid. To this end, every leader should ensure the creation of a robust security strategy.
As every company becomes a data company, all data becomes mission critical and needs to be treated as such. The six technologies in this book build bridges between the digital and physical worlds. When objects, people, and infrastructure become connected, they become an attack surface to a hacker. Smart objects connected infrastructure, sensors, robots, drones, and other autonomous machines turn digital threats into physical threats. Push vendors for end-to-end security solutions, even for low-cost devices that integrate cheap computing and sensors. Cyber-criminals find and exploit the weakest link. Don't open your business to hackers to save a few cents per unit. Even sensors must be properly secured. Don't let hackers spy on your business or spoof your sensors with false data that causes your business systems to behave incorrectly. Hybrid workers, who rely on digital intelligence and work instructions delivered through augmented reality, must be secured to stop criminals hacking their perception and guiding them to perform tasks they shouldn't. Build a security strategy that comprehends all of these factors.
As you lead business transformation, automate with intention, augment talent to elevate work, and deploy technology in service of improving the human condition, strive to create more meaning in people's lives and boost human-to-human connection. If you do, customers and the market will reward you, no matter what line of business you are in.
A sweeping panorama of possibility lies in front of every business. In the 2020s, new technology will transform entire industries and solve previously impossible problems. Don't be limited by the past. Nintendo evolved from a playing card company to become the video-game powerhouse it is today. They embraced technology to fulfill their core purpose (enabling play) in new ways. You can too.
You are limited only by your creativity and your ability to inspire others to drive change. The same is true of all your competitors. In a time of great possibility, those with the strongest sense of purpose and the greatest will to drive change will prevail. To sit at the nexus of extreme competitive pressure and powerful positive purpose is to be at the heart of The Innovation Ultimatum.