Thriving in the Third Connected Age
In 1989 Tim Berners-Lee invented the World Wide Web and launched the modern era of the internet. Between 1989 and 2007—for eighteen years—we lived in the First Connected Age, where the key connection was a link on a web page. The company that best monetized how to organize and search through the links was Google, and the company that best monetized e-commerce on the other side of the link was Amazon. Search and e-commerce were the big benefits of the First Connected Age, and they reordered everything from newspapers to magazines to retail. Amazon and Google are two of the most valuable companies in the world.
In 2007 we entered the Second Connected Age, where the modern mobile device and social networks came to be. We were now connected all the time and connected everywhere. The company that best monetized mobile was Apple, and the one that best monetized social was Facebook; both joined the ranks of the most valuable companies.
Today we are entering the Third Connected Age, where there will be four additional connection points building on search, e-commerce, social, and mobile. These are data connecting to data via deep learning that drives AI, things connecting to things via the IoT, new ways of connecting such as voice and augmented and virtual reality (VR), and much more powerful ways of being connected via 5G.1
The coming years are going to bring all types of digital breakthroughs—some foreseeable, some not. I don’t think anyone would argue against the premise that the world of work is going to change in the next five or ten years, that everything from robotics to AI will transform workplaces again and again. No doubt we’ll be staring at screens even more intently in the future than we are now.
Despite this, I’m convinced that the majority of organizations will not become soulless machines, cranking out products and services with great efficiency and little empathy or creativity. Instead, they’ll find ways to integrate story and spreadsheet and by doing so will restore the soul of business. They’ll recognize that, ultimately, organizations are most effective when they’re places in which relationships, ideas, and risk-taking are allowed to flourish; that as important as measurement is, meaning is equally important; that people who think blockchain is the holy grail are blockheads.
The story and the spreadsheet isn’t a contradiction but a paradox; you don’t have to choose between the two but find the right balance. To see how to move forward in a balanced direction, let’s look at emerging trends and how they might play out in the future.
The Implications of Intense Connections
According to a November 2017 McKinsey study, while only 5 percent of jobs can be fully automated, 60 percent of all jobs have some parts that will be automated to a great degree. By 2030 this will result in the displacement of 400–800 million people around the world from their jobs, requiring them to be retrained. Physical jobs that are repetitive, office support, and basic customer support and retail will be the most impacted.2
This is not just a US phenomenon but a global one. For instance, according to CNBC, between 2012 and 2016 massive iPhone producer Foxconn’s operating revenues increased slightly, but its head count declined by almost one-third. More than four hundred thousand jobs were eliminated as tens of thousands of “Foxbots,” factory robots, were deployed. Foxconn is targeting 30 percent automation by 2020.3
Amazon, which today employs more than six hundred thousand people, is increasingly automating its warehouses, where it has more than one hundred thousand robots. Its algorithms for pricing and recommendations are getting so good that its machine learning is replacing humans.4
These and many other studies and projections suggest we’re on the cusp of the Third Connected Age, where a combination of AI, the IoT, and new communication technologies of voice, augmented, and virtual reality will change everything; they will take work and play to a new level, building on changes wrought by the First Connected Age of search and e-commerce and the Second Connected age of social and mobile.
We will be surrounded by devices that sense and anticipate what we need, that will embed and extend themselves everywhere as everything accelerates because of faster chips and 5G speeds.
In this world, what will our roles be as humans generally and as leaders and managers specifically? Where can and will we add value to ensure a productive and meaningful life? Will we use advanced machines to extend ourselves or will advanced machines extend so much into our worlds that there will be little place for us?
Again, I’m an optimist about science and people as well as a mathematician with an abiding interest in technology. I believe we can and will be better off as humans and organizations in the future, but the path forward will require courage, political leadership, and patience.
Here are the challenges we must meet to realize this optimistic future:
THE SPEED OF CHANGE. While things have been changing relatively fast in the past decade, the rate of change will increase exponentially in the next decade as we enter the Third Connected Age. In fact, it may outstrip human capability to adapt and the ability of political and legal institutions to keep pace.
Part of the problem is that some of us react to change without questions or conscience; we aren’t concerned that we’ve ceded decision-making to machines. Some of us, though, have the opposite reaction to change. We long for a slower, more easily understood past and distrust all the changes speeding by us. We become insecure and tuck our heads in the sand; if we ignore it, maybe it will go away.
It won’t. We need to learn how to work when everything is moving a lot faster than previous speed limits.
THE GLUT OF DATA AND COLONIZATION OF TECHNOLOGY. According to a recent New Yorker article, the average doctor in the United States spent two hours in front of a computer for every hour they spent with a patient.5 Scientists are overwhelmed with the reality that 2.5 million new scientific papers are published every year and this number is increasing. The constraints of a twenty-four-hour day and the limits of the human mind are no match for the infinite speed and abilities of machines.
Accept that data is everywhere and that you can’t process as fast as machines, but don’t think for a second that human instinct, experience, and creativity are “less than” data. That doctor’s hour with a patient is far more valuable than the two hours in front of a screen.
THE HYPERCONNECTED WORLD. The world is with us too much. Between updates, notifications, breaking news, FaceTime calls, instant messaging, social media, and more, we feel ourselves enmeshed in a web of impulses, stimuli, and expectations. Much of this stimulus is algorithmically optimized to get us addicted and engaged. As technology improves the stimuli of computing—through virtual reality and other means—we will be increasingly drawn to digital connections and increasingly more likely to be isolated from others. Again, we must strive to resist the pull to digital so we live and work in a balanced manner.
If these challenges seem daunting to businesses seeking balance, never fear: opportunities exist in equal measure. Technology has given organizations the opportunity to help their people:
LIVE AND WORK MORE MEANINGFULLY. As machines take over mundane or boring jobs, they will free up people’s time and minds to do more fulfilling things—to come up with better products and processes or create innovative tactics and visionary strategies.
While technology eliminates some jobs, it gives birth to others. Because of advances in transportation and the wealth created due to globalization, more jobs exist today in tourism than years ago, despite many travel agents having lost their jobs. In the Western world, one million more people work in tourism than in agriculture. In organizations, we have more opportunities to pursue impactful, fulfilling assignments rather than repeat rote tasks.
EXPLORE AND SEIZE OPTIONS. Modern technology allows us to work from home, the road, anywhere we choose. While Uber has negatively impacted the price of medallions and the livelihood of taxi drivers, it has made us a more mobile society and created alternate revenue streams. Modern technology offers more choices even when it eliminates some options and industries. Yes, many great movie theaters and record stores are gone, but surely a world with Netflix and Spotify is a much better one than if these services didn’t exist. More to the point, technology offers us all sorts of fresh ways to work, from incorporating social media into the mix to offering tools for instant research.
MAKE CONNECTIONS. Our minds and our sophisticated language separate humanity from other living beings. Companies like Google, Apple, and Facebook are so valuable because they amplify our minds and our ability to communicate. These and other technologies help us connect with each other more than ever before. Even since we’ve made a connection leap—from the first seafaring lanes to internet cables—the world has been better off. The more we find ways to capitalize on enhanced connectivity, the better off our businesses will be.
Capitalizing on these opportunities, however, can be a challenge when you’re swept away in a daily data avalanche. It’s all too easy to tip the balance toward the spreadsheet, and it’s just as problematic to tip it too far in the story direction. We need to face the following realities, and in so doing, find a viable midpoint:
IN WHATEVER JOBS OR PARTS OF JOBS TECHNOLOGY CAN DO BETTER THAN PEOPLE, THEY WILL REPLACE PEOPLE IN THOSE PARTS OR JOBS. This is inevitable because of the Darwinian reality of capitalism. Productivity drives wealth and growth, and if one can get more output for less input, the economy or company that optimizes this will win.
LEADERS AND INSTITUTIONS SHOULD INVEST IN PREPARING THEMSELVES FOR THIS REALITY. You can’t fight the future. Leaders of countries and companies need to recognize that a significant percentage of their respective populations will possess skills and knowledge that are no longer as valuable as they once were. This means we need programs for retraining people so they can acquire valuable skills and knowledge and find good jobs.
People who are too far on the story side of the continuum may resist this reality with good intentions and bad results. And there are reality-deniers who blame immigration and globalization for people losing their jobs, while the truth is that we in the West are never going back to the “good old days” of big factories everywhere that depended on lots and lots of workers.
INDIVIDUALS SHOULD INVEST IN THEMSELVES AND IN UNDERSTANDING HOW TO ADD VALUE IN THIS NEW WORLD. To paraphrase John F. Kennedy, ask not what your company can do for you, but what you can do for your company. Individual responsibility for relevant skill development is a key to future success—for both the individual and the organization. Perhaps more to the point, we need to maximize our value by melding our uniquely human traits to technology.
Creativity and empathy are hugely important overlays for maximizing tech value. Creatively, we can find new ways to use social media to benefit the organization. Empathically, we can recognize the pain points employees have when working with a given system and find ways to eliminate the pain. We must leverage our human abilities to maximize machine capabilities.
Tech Is Nothing without Talent
This last point has been the subject of some debate. At this point, I hope I’ve waved the yellow flag with sufficient vigor. The worst-case scenario is that our embrace of technology may leave people in the dust: as we become ever more reliant on data and measurement and robotics, organizations will lose the ability to rely on instinct, to draw on experience, to take risks, to be innovative and agile.
It doesn’t have to be this way. As much as I’ve warned about the dangers of too much digital without enough analog, I believe that organizations will recognize the value of people even as they’re becoming increasingly dependent on machines. Most organizational leaders aren’t technomaniacs; they realize that historically, people have been responsible for their companies’ success and that people will be responsible for it in the future.
Leaders do need a nudge toward this realization. They must think about the implications of the rise of data: how every company is becoming a software and data company to survive, and the rules of cold, calculating math and algorithms could drive out the people and ideas that lack a spreadsheet-only focus.
Fortunately, a number of highly tech-oriented company leaders have thought through this issue and pursued a balanced strategy.
Among the most valuable companies in the world is Apple. It has harnessed technology and logistics to an unprecedented extent by building an incredible supply chain in China and offshore financial engineering, among other financial and data-driven decisions. But what makes Apple valuable is its creativity and design. Most people forget that when Apple first launched the Apple Store, Dell was a market leader in the category, having built the ultimate low-cost manufacturing and distribution machine through direct sales. Dell machines were cheaper and often better powered than Macs but a combination of design, ease of use, and the Apple brand and stores helped them dominate Dell and made Apple the leader. Today Apple is investing deeply in all things community and creative with its stores, in content and in its advocacy for privacy.
It’s not just Apple; many other companies from Rolex and Patek in Swiss watches to Domino’s Pizza combine technology and humanity to win in their categories.
Rolex today sells 70 percent of all watches that cost more than $5,000, and they have used the most modern of technologies to run their factories. The premium they or Patek receive for their products has nothing to do with the machines but everything to do with the art. Both companies have used technology for what machines can do better, and both—particularly Patek—have hundreds of artisans whose work, as well as the design and legacy of their brand (all of which is emotion and not rational), creates the value for them.
Domino’s Pizza went from a low-cost, low-quality pizza with fast home delivery to a much higher-quality pizza with technology that customizes delivery and customer monitoring (of the pizza’s progress from ovens to the customer’s door). Domino’s uses technology as an ingredient to separate itself from competitors, and if you had invested in them ten years ago you would have a better return than if you’d invested in Apple, Google, or Amazon. Domino’s realized that when it comes to fast food, people wanted greater control over where their food was delivered and wanted more transparency about when it was delivered. They used technology to meet this human requirement.
The best companies leverage technology and data to be successful today, but they do more than this to ensure their success tomorrow. To sustain success, they do more than find a brilliant way to use blockchain or to capitalize on an algorithm. Technology has only limited value without the human component for two reasons:
Technology is a commodity.
First, with a few exceptions, almost all technology can be outsourced and rarely is a long-term form of competitive advantage; even the most innovative technologies are knocked off quickly. Combining technology with other ingredients, however, creates sustainable edges. The other ingredients are almost always noncomputational and irrational. These include provenance (the history of a brand or its people), design, experience, innovation, branding, and storytelling.
Talent is a differentiator.
If a company is run purely by data and machines, it will quickly fail because the most talented people in such companies will have no meaningful role. In these organizations, math is the decision maker. Just as important, while technology is good at detecting patterns and projecting the predictable, it’s poor at anticipating anomalies and surprises. People do a much better job at reacting on the fly to sudden twists and turns; they’re the ones who have to recalibrate and re-engineer the machine.
The path forward seems obvious when we’re looking at it from the removed perspective of a book, but it’s tougher to see when you’re in the thick of things. Think back to a time when new modes of transportation or electricity were being introduced. Companies that failed to leverage these developments fell by the wayside. At the same, relying exclusively on electricity or transportation for a competitive edge was not an effective long-term strategy (because every successful company possessed these resources).
Now and especially in the future, organizations must find the sweet spot between the two. Focusing on organizational design and the mindset of its talent is a way to find it.
As you’ve read, I love the phrase, “the future does not fit in the containers of the past.” It is no use leveraging data and technology if you’re trying to stuff tomorrow into today. Think about how Uber is organized; or rather, think about how it is not organized—like a taxi company with taxi company skills. It has no medallions, full-time employees or drivers, and no depots. Instead it has mapping, computational technology, and recommendation engines. Uber leadership designed a company and its talent to what the customer needs and how they buy or use the product.
In addition, the talent in the company must be trained and incented to optimize the future while defending the past. In his book Freakonomics, Steven Levitt shows time after time that if you want to understand someone’s behavior, you must study their incentives.6 Too many leaders talk about tomorrow but organize for today and incentivize to protect yesterday.
Why? Because cannibalizing your own business feels suicidal and demolishing your legacy structure is expensive. Leaders may also know that their people lack the skills necessary to thrive in the future or may be scared by the expense of hiring people who possess these skills.
So it’s scary. But it’s also necessary. Companies can’t map future strategies and expect to succeed unless they hire the right people, give them the right incentives, and develop them in ways that help them leverage new technologies.
That’s a tall order, admittedly, but it’s one that can be filled if companies seek balance. The problem, of course, is exponential change.
Runaway Machines
When technology advances exponentially, society and organizations benefit while some people suffer. Yuval Harari, author of Sapiens and Homo Deus, worries that a combination of AI and advanced biotechnology will so alter society that more and more people will be replaced by machines, creating a group of individuals who belong to the “useless class.” Harari rails against a quasi-religious order that embraces “data-ism,” concentrating power and wealth within a “super class.”7
It’s not only Harari who warns of the danger of exponential change. Luminaries such as Elon Musk and Bill Gates worry that the capabilities of AI have become so advanced that managing their use is too important to be left to technologists alone; government and societal groups must be involved.
I’d offer similar advice to organizational leaders: don’t turn over all the power for tech decisions to your tech people. Leaders and managers in nontech disciplines need to be involved in the decision-making process. They’re the ones who have to raise yellow or red flags when the harm a new tech innovation causes outweighs the good. They’re the ones who always have to ask: What is the people downside of this innovative _________? (Fill in your company’s digital blank.) Are our employees, customers, and other stakeholders going to be frustrated, confused, dispirited? How many people will lose their jobs because of this?
With technology adoption comes responsibility. It doesn’t matter whether you’re a parent, a technocrat, or an organizational leader. You’re responsible for the technology you’ve brought into the world.
Part of this responsibility is legal. Governments are paying attention since the algorithmic power of digital media impacts elections and outbreaks of violence and civil strife. The monopolistic tendencies of Google, Amazon, and Facebook may lead to antitrust action.
As technology spreads, parents worry about the impact of screens on children. Harari believes in disconnecting and silence to such an extent that he does not speak for two hours daily and two months yearly.8 (I’ve already shared my own less radical disconnecting routine.)
Ultimately, humankind will master machine and restore the balance between technological advances and human concerns. Doing so, however, will require a heightened consciousness about these issues and corresponding actions—an investment in education and retraining to minimize social impact. We will also require leaders who can find ways to align people with technology (versus those leaders who turn a blind eye to technology’s effects or who have a Luddite-like opposition to technology).
Here is just a sampling of emerging technologies or technology-related trends that will have a huge, lasting impact:
1. AI, from machine learning to natural language processing
2. Biotechnology, particularly gene-editing technology such as Crispr and CAR T-cell therapy
3. Computing advances such as Quantum computing
4. Data transference at high speeds everywhere to all devices as we move to 5G
5. Environmental changes driven by global warming and new frontiers of ocean agriculture and mining
6. Full-scale changes in big industries: automobiles with electric, self-driving, and on-demand cars; finance with computer-driven portfolios and trading; retail with omnichannel juggernauts such as Amazon and Walmart; and new direct-to-consumer brands such as Dollar Shave Club and Casper; and health care and education, which are still stuck in the past even though both medicine and knowledge have soared into the future
We need leaders who not only adopt and promote exponential technologies but who speak out about the negative effects of these technologies. From Tim Berners-Lee, who created the World Wide Web and is calling for a less commercial and snooping web, to Salesforce CEO Marc Benioff, who is speaking out on the societal evils of inequality, we need leaders with a conscience, leaders with empathy, leaders who recognize the value of finding the middle ground.
Making the Connection
I’ve touched on this point earlier, but I want to expand it based on three future developments. Digital connectivity leads to analog empathy. The more ways we have to connect with other people, the more opportunities we have to develop empathy and meaningful work relationships.
Your organization may be filled with tech geeks, but behind their external obsessions with cryptocurrency, blockchain, and coding reside beating hearts. Human beings crave connection and are communal animals. More than two billion people check into Facebook every single day, and many of them want nothing more than to reach out to someone who is their friend. Historically, people used to do this all the time at religious and community gatherings, but today they’re connecting online.
Many people criticize online connecting as superficial or tribal. In the former instance, we’re sharing trivial information, the type of exchange that fails to build relationships. In the latter, we connect only with people who share our points of view, denying ourselves the chance to debate and reflect, learn and grow.
Real empathy and meaningful relationships develop only when we connect on a deeper level. I believe three existing and spreading technologies will facilitate empathy and meaningful work relationships:
1. Voice. More than a billion people already have phones with the equivalent of translation machines, which allow people speaking different languages to converse with each other. In 2018, during the World Cup, one of the most popular apps in Moscow was Google Translate, which connected people from all over the world. Siri, Alexa, and Google Assistant represent another form of voice technology.
In global organizations, translation apps make it far easier to communicate with people in offices around the world—it’s a lot easier to empathize with others when we can understand them. Siri, Alexa, and Google Assistant facilitate our search for information and ideas, providing easy access to knowledge that we might never have encountered before. This knowledge can range from a provocative business theory to case histories of innovative companies. Whatever it is, it can be a catalyst for conversations—new and stimulating ideas prompt us to share them with others.
2. 5G. It’s one hundred times more powerful than today’s technology. Imagine a world where everybody can access applications, services, and utilities instantaneously. 5G will make today’s connection feel as slow and dilapidated as dial-up modems. The faster and more pervasively we can connect, the more ideas we can access and the more people we can touch and be touched by.
3. Visual, augmented, and mixed reality. Talk about empathy: virtual reality will allow us to be educated about and to literally walk in the shoes of others. Or imagine visiting an office in another city for the first time and flowing across a device connected to our eyes are facts and figures about every person and object encountered—this is augmented reality. It will help us find kindred spirits in other companies as well as people who possess opposing but credible viewpoints. Augmented reality can make us aware of people we need to talk to and get to know—we might not even be aware of these individuals’ existence without this technological tool.
These technologies are as much about connection as computation and provide organizations with the chance to implement an organic balance of spreadsheet and story. Savvy businesses will leverage these opportunities, recognizing how valuable these inherently balanced technologies are.
In fact, we’re already seeing this happening in the hospitality sector. Major hotels are embedding voice technologies into their rooms, allowing guests to run room functions or learn about the property and city they are in. Soon their destination guides will embed AR and interactive voice response and translation to make individuals feel more at home and informed wherever they are.
Business will use these not only to decrease costs but to increase the experience of customers. Beyond the customer experience improvements resulting directly from the new technologies, employees will gain valuable minutes—or even hours—daily to focus on tasks that use their experience and expertise, their creativity and relationship-building abilities. As information retrieval and dissemination become automated and delivered through easy interfaces, people will no longer be spending the bulk of their time doing mindless or repetitive tasks.
Service reps, for instance, will be able to listen carefully to the requests that cannot be handled by machines. This could be people who—due to age, training, or disability—are not able to get the information they need or because new information systems give rise to new, unexpected questions. It also will give reps the additional time they need to engage in two-way, deeper conversations—the kind of conversations that are most helpful to customers and that provides reps with the most satisfaction. This is what leads to connection and empathy.
Of course, spreadsheet-minded organizations will only concentrate on the efficiencies of these new technologies. Spreadsheet-story organizations, on the other hand, will look at the benefits beyond cost savings and maximize the empathy and relationship-building aspects inherent in these technologies. Training in empathy and relationship-building will become even more common in the future.
Technology Opens the Door for New Stories
Again, I’m defining story in the broadest business sense possible. People have ideas they want to test. They have improvements to processes, new product concepts, and more effective ways of managing customer relationships. Customers and suppliers have their own stories too—stories about bad service as well as ones designed to put their own spin on the supply chain.
As I’ve discussed, screens, social media, algorithms, and other products of our digital age can suppress these stories; the emphasis on data and measurement, the lack of face-to-face time and other factors can discourage people from articulating their ideas and convincing others of their value.
But technology is also capable of communicating stories. Let me tell you about my older daughter, an aspiring filmmaker. In October 2018, I assisted her on the set of her second movie, Shadows, which she directed and wrote. My job was that of the “best boy” grip: picking up equipment from rental houses, moving lighting and rigging equipment from location to location, and filling in wherever the crew needed help.
Over my five days on set, I marveled at how modern technology was allowing her to tell her story. Here are seven ways technology facilitated the process:
1. Access to studio-level equipment. The superior capabilities of digital camera and sound equipment, which are increasingly portable, allowed her to rent for a few thousand dollars what would have cost millions of dollars ten years ago.
2. Fund-raising. Our daughter raised the funds for her movie via a crowd-funding site called Seed and Spark, to which she uploaded videos, distributed updates, and set out a menu of benefits for different levels of investment.
3. Locations. All of her locations were rented via Airbnb, and we moved from locations in Queens to Brooklyn in a rented U-Haul truck, finding our way with Google Maps to neighborhoods with which none of us were familiar.
4. Casting. A combination of mobile video and online sites allowed her the ability to cast a wide net and find unique characters for her movie. By sharing her script via a former colleague, she even had a leading cast member of the Netflix show Orange Is the New Black available for a day to play a key role.
5. Logistics. The script called for shooting primarily at night, and most days the shoot ended at 3:00 a.m. But being in distant parts of Queens and Brooklyn was no hurdle, as a cavalcade of “limos” provided by Uber and Lyft arrived to take the crew home. They conference-called with each other on their mobile phones, plotting the next day as they were driven home. And, of course, online restaurant menus and Uber Eats made food services easy.
6. Dailies. At the end of every day’s shoot, the film was captured on hard drives, uploaded to the cloud, and could be accessed and viewed and listened to in real time.
7. Distribution. While filming her second movie, our daughter was negotiating distribution of her first movie with a couple of streaming sites.
Modern technology reduced the film’s cost from around $1 million (the estimated cost a few years ago) to less than $15,000 today, but the real breakthrough was the opportunity for my daughter and others to tell a story. Her movie touches on religion, family, and fear of the “other,” and it was made despite not being as commercially viable as, say, a superhero movie. It was also a film whose director, cinematographer, writer, producers, assistant director, production designer, and sound mixer were all women.
And it was a movie whose primary cast members were Hispanic (one of the reasons a lead character from Orange Is the New Black agreed to be in the movie was the rarity of featured roles for Hispanic women).
My daughter’s experience is just a microcosm of a larger trend. The Time’s Up movement is leveraging social media to enable fairness in hiring practices. And streaming options, from Netflix to Amazon to niche platforms, are creating a renaissance in storytelling that is more inclusive and offers a broader spectrum of film that resonates with diverse cultures.
Organizations should endeavor to use social media, new software programs, digital communication tools, and other technologies to help tell people’s stories—from employees to customers to vendors to partners. When doing so, they need to keep the following two pieces of advice in mind (one of which I’ve shared, one of which is new):
1. The future does not fit the containers of the past.
2. The future does not come from the heavens but the slime.
The future does not fit in the containers of the past.
Giving people a voice means more than allowing them to blog on the company website or setting up a digital forum for customers to air their complaints. That is nothing more than the old suggestion box approach. Every aspect of business is being rewired, and embedding the new technology into the old ways of working will not be enough. Uber did not just become a competitor to taxis but an alternative to car ownership. No garages. No vehicles. No drivers.
Mary Meeker of Silicon Valley venture capital firm Kleiner Perkins speaks about how every business must learn to reimagine themselves for the future.9 What will GM be when fewer people own cars or the cars are increasingly electric and shared? Will internal combustion and dealership knowledge matter? Will driving experience matter if most of the time the car is driven by someone else or is self-driven?
A company that has reinvented itself with great success after being written off by Wall Street is Best Buy. Here is a company that married cutting-edge technology and speed by being willing to match any competitor’s price immediately in the store, leveraged their store locations to arrange even faster deliveries than Amazon, and most important, used knowledgeable people—whether it be blue shirts in the stores or the Geek Squad—who would help install and wire homes for the modern age.
New stories need to be told in new ways. I would bet that people exist within GM that have fresh, vital visions for the industry and the company, who have tremendous ideas that need not only to be articulated but discussed and tested and measured. The suggestion box approach won’t work with such powerful, potentially revolutionary ideas. Admittedly, it’s difficult for organizations to break with their pasts to reimagine their futures. Unlearning what you’ve been taught is even more difficult than learning new ways of doing things. Perhaps that’s why few companies have reinvented themselves, especially when the leadership that built the legacy business remains in place, even as that business is being disrupted.
The future comes from the slime.
A less slimy way to make this point is that future innovations and breakthroughs will emerge from those at the bottom, hidden from view. This idea was first popularized by Clayton Christensen in his book The Innovator’s Dilemma. Nokia, Ericson, BlackBerry, and Sony kept an eye on each other but could not imagine a start-up phone without a keyboard from a computer company called Apple—and how this would change the rules of the game. In industry after industry, upstarts leveraging new platforms help them compete with large companies. The ones lacking a legacy mindset and without huge investment dollars are the ones that are growing.
According to the Economist:
Companies such as Casper, which sells mattresses, Warby Parker, a spectacles brand, and Glossier, a cosmetics firm, were once seen as interesting curiosities. Touting their products online, luring customers with digital advertising and eschewing conventional retailers and marketers, they were anomalies shaking up small segments of retail. In fact, the growth of microbrands—or direct-to-consumer (DTC) brands—represents a profound shift in the consumer-goods sector.10
Per Nielsen, the biggest twenty-five food-and-beverage companies generated 45 percent of sales in the category in America but drove only 3 percent of the total growth in the industry between 2011 and 2015. A long tail of twenty thousand companies below the top one hundred produced half of all growth.11
These small companies that emerge from the slime use technology to get their stories heard. Their cultures are more transparent and agile than their bigger brethren. Employees are encouraged to take risks, to beta-test ideas, to speak honestly and authentically. They listen harder and more continuously to what their customers are saying; they use technology astutely to obtain customer stories, setting up online forums for idea exchanges and tracking customer behaviors in innovative ways.
The start-ups and upstarts are poised to take over their respective industry worlds, armed with the best technology and using it to meet people’s needs.
Limit Exposure to Screens Like a Responsible Parent
Too much of anything can be a bad thing. New technology is like a big bowl of the best chocolate chip cookies fresh out of the oven—we want to eat every single one of them. Businesses are hungry for new and better technology. They are eager to consume whatever is hot, whatever is promising more delicious data.
Imagine the prototypical tech geek, spending ten hours daily in front of screens, stuffing his face with junk food and obsessively coding, texting, and responding to notifications. As brilliant as this techie might be, he is not someone who is leading a balanced work life. His story is lost to his myopic spreadsheet focus.
Let’s switch analogies for a moment. You may be aware of the trend among Silicon Valley parents to restrict their children’s use of digital devices. A recent New York Times article noted, “The people who are closest to a thing are often the most wary of it. Technologists know how phones really work, and many have decided they don’t want their own children anywhere near them. A wariness that has been slowly brewing is turning into a region wide consensus: The benefits of screens as a learning tool are overblown, and the risks for addiction and stunting development seem high. The debate in Silicon Valley now is about how much exposure to phones is O.K.”12
As much as I believe that the benefits of technology outweigh the negatives, too much screen time increases children’s isolation and limits them socially. Similarly, organizations that are too enmeshed in their digital worlds fail to nurture qualities such as empathy, creativity, and agility.
For this reason, they need to limit their own version of screen time. Organizational leaders must continually ask themselves questions such as
• Are we becoming overreliant on the data to read the market and underreliant on people’s perceptions and experiences?
• Are we spending too much time communicating via devices and too little time in face-to-face interactions?
• Are we measuring performance primarily based on if people or teams make their numbers—versus the relationships they establish, their ability to inspire others, their provocative and wide-ranging ideas?
These types of questions don’t subvert or subordinate machines; they balance them with story. It’s a mistake to think that in our increasingly technologically sophisticated future, it’s a matter of machines versus people. Instead, we need companies where each maximizes its capabilities. If they do this, they will gain two significant advantages:
COMPETITIVENESS. Without modern technology, a company cannot be competitive. But with only technology most companies cannot differentiate and therefore garner market share. The differences in most companies will come from the layer they add to technology and how they integrate the human and data. These are skills of creativity, innovation, communication, design, and storytelling.
FULFILLMENT. People are happiest when they have a sense of autonomy, mastery, and purpose. While the world is increasingly digital, people at heart remain analog. All of us are stories filled with memories, feelings, and dreams intersecting with other stories, and in the intersection we connect, live, and learn. When technology serves as a boost to these innate expressions and allow us to connect and communicate, we feel like we’re doing something meaningful. Identity, purpose, affiliation—these are the outcomes for employees who work in spreadsheet-story balanced companies. People who feel fulfilled work harder, longer, and more creatively—they care, and their caring drives them.
Companies of the Future
The challenge today, and even more so in the years to come, is finding the sweet spot between story and spreadsheet. It’s a growing challenge because our technological capabilities continue to increase exponentially. Organizations are enticed by the possibilities of robotics, analytics, and the like. They are enticed because these advances promise greater speed and efficiency, more revenue, and more profit.
The danger for organizations is that they can become astonishingly productive and profitable, but they lose their soul in the process. And companies without soul are places where no one wants to work, and eventually their fabulous productivity and profit will exit along with their best people.
Business leaders need to strive to balance story and spreadsheet continuously and variously as new technology flows into the workplace. It’s a significant challenge, but one that can be met. Two companies today provide models for how.
Pixar is a technology company pioneering at the cutting edge of computer animation. It is also known as one of the most compelling and emotional storytelling companies in the world. Almost every one of its dozen-plus movies has been a massive hit that left audiences in rapture about not only what they see on the screen but its emotional impact.13
It’s not just that Pixar’s product balances humanity and technology; its culture also strives for this balance. Cofounder Ed Catmull has noted that Pixar’s culture focuses on caring for employees as people, ensures a purpose that people can be proud of, and encourages self-expression and diversity of thought.14
In an article in the Irish Times, Catmull was asked if technical challenges emerge from the artistic ideas for a film or if films emerge out of new technical capabilities. He said that both were true. “We say, the technology inspires the art, and the art challenges the technology.”15
Like Pixar, Adobe’s policies and culture reflect a blend of human and machine. Adobe began as a technology company selling creativity-related products like Photoshop. Over the past five years, it has transformed itself into a company that sells online subscriptions for a suite of creative, marketing, and document solutions, helping people change the world through digital experiences.16
From a product standpoint, Adobe balances data and software with humanity and storytelling. But they don’t stop there. This balance is incorporated into every aspect of its culture and marketing. CEO Shantanu Narayen begins each week analyzing real-time data and results in granular data using their own powerful technology. Their depth of data detail on running the company is second to none; they rely on deep data to drive the sale of engaging experiences.17
But the company is also a pioneer in an inclusive, open, diverse, and human culture. Narayen has said, “At Adobe, we believe that when people feel respected and included they can be more creative, innovative, and successful. While we have more work to do to advance diversity and inclusion, we’re investing to move our company and industry forward. We call this Adobe For All.”18
Organizations Reflect Society
In the November 18, 2018, New York Times Magazine, the cover headline was, “What Will Become of Us? How Technology Is Changing What It Means to Be Human.”19 The articles in the magazine explore topics ranging from AI to gene editing to data-driven medicine, but the overriding point is that developing technologies will have a huge impact on every aspect of our lives. Articles suggest that AI might serve as a sort of crystal ball enabling us to predict future events, that DNA analysis can determine our chances of being successful human beings.
Yes, technology will change humanity, and it will also change business. Like most change, there’s a lot of good and a lot of bad accompanying the evolution. My refrain in this book about balancing the story and the spreadsheet is all about maximizing the good and minimizing the bad. Only by embracing the best of both worlds—the digital one of machines, the analog one of people—can we create and sustain great organizations.
We need to prepare for breakthrough technologies—for AI that allows us to see five years down the road and the new, emerging markets and changing customer preferences. In our enthusiasm to embrace these technologies, we also need to take a step back and think about how they will affect the human elements of our businesses. Then we need to implement programs and policies designed to preserve the human—the creativity, risk-taking, relationship-building, empathy, and so on—that defines us at our best.
If we can do that, the future is ours, and we have no limits on what we can accomplish.
KEY TAKEAWAYS
• Advances in science and technology will improve people’s lives, as long as we recognize and manage the accompanying risks and downsides.
• Success in the future will require integrating the story and the spreadsheet, the math and the magic, the analog and the digital.
• In the end, it’s people and dreams that matter, and companies must never forget the soul that drives them.