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Posted by Tom Cheesewright on

The future human will be more educated than augmented

When we discuss the future human it is so often a question of physical and mental augmentations. Of our health, fitness, strength, knowledge and capabilities. Personally, I would like to be able to operate at my optimum mental capability for more of the day and more days of the week. All it takes is one poor night’s sleep and a day is lost.

How much more could we achieve with control over such factors?

In reality, these will be expensive and hard-won enhancements. Even when the technology is available, social acceptance and legal approval will take time. After all, I could have experimented with Adderall or Ritalin to overcome my sleep-restricted focus, but I haven’t. Perhaps if I were a generation younger they would be as normal to me as paracetamol.

Without drugs, or genetic engineering, or digital prosthetics, we know there is a massive gain to be made in human capability. One that affects everyone rather than the privileged few. And one that requires no great advances in anything other than political will.

Genetic gaps in learning between individuals are generally not that great. The largest ever study of the impact of genetics on educational attainment found a difference of 3.2% on the number of weeks of schooling an individual would complete given the maximum genetic potential versus the minimum. To put that into context, someone with two copies of the gene with the strongest influence might complete just nine weeks more education than someone with no copies.

In this context, environment is everything. How much raw intelligence is genetic is still the subject of frenetic debate. But we know that education is a good predictor of life outcomes. As this blog documents, in two studies accounting for all other factors, Steve Machin, Olivier Marie and Suciča Vujić showed that increased education has a significant impact on crime rates.

Part of the reason for this they suggest, is the ‘incapacitation effect’. Simply, if you’re in school or college you’re not elsewhere committing crime. As automation ramps up and begins to wipe out more jobs, it’s likely this incapacitation effect will start to become more important.

It is increasingly clear that this wave of technological unemployment is structural rather than temporary. AIs replacing call centres, administration and back office jobs. Drones replacing delivery drivers and postal workers. Robots running production lines and warehouses.

These technologies don’t completely replace people. But they allow a very small number of people to do the jobs of tens or hundreds. The AI I saw demonstrated recently could realistically replace 80% of call centre workers. A million people are employed in call centres in the UK. Imagine if the same maths applies to manufacturing (2.6m), and logistics (1.7m).

This technological revolution will undoubtedly create new jobs but there is little visibility of new employment on the scale and at the education levels of those already being replaced. Human beings remain cheaper than robots for many physical tasks right now, due to their complex combination of capabilities. But this won’t last. Humans may be more attractive as carers than machines, but how high can we afford the ratio of carers to clients to be? One to one would be incredible, but it may not be economically realistic when jobs are the privilege of the few.

What we see is a likely future of people without purpose. And we know that people without purpose are more likely to cause problems.

How do we give people purpose? Well, perhaps education is it. Life long education as a route into the jobs that are available. Life long education as a way to move between careers as industries change ever more rapidly. But most importantly, life long education as a respected goal in its own right.

Imagine a nation of philosophers, a word that literally translated means ‘wisdom lover’. People hungry for knowledge and respected for its acquisition, with or without commercial application.

Perhaps this is straying into the realms of fantasy. But one thing is clear. Future humans may be augmented in all sorts of ways. But at a societal scale, we can achieve much more, much faster through education than augmentation.

Education might not be able to offer people a higher wage. But it might be able to offer them a purpose.

Posted by Tom Cheesewright on

The Objective Gap: Between a company and its people

The objective gap: can you align everyone to the objectives of the business?

Every day’s a school day. It’s no different if you’re the ‘expert’ in the room.

I spent yesterday running a workshop for leaders at a large global corporation, walking them through the Intersections foresight process and introducing Stratification, our framework for agile organisations.

We’re quite upfront that neither of these processes are a ‘magic bullet’ solution. They are simply different ways of examining, and potentially solving, a common problem: How do you build a sustainably successful business in an accelerated age?

One component of the Stratification framework is a Unit Template, designed to help people understand the inputs, outputs, and metrics of each business function. I built it as an attempt to segment out the functions of an organisation in a format that could be simply understood as a set of building blocks that — when assembled together — create value.

What I had never had to articulate before a series of smart questions yesterday, was where this set of functional metrics sat in the overall corporate hierarchy — a space often rich with different objectives and KPIs (key performance indicators).

This is in part the result of how our toolkit is developed: not through academic enquiry but through experience.

In two consecutive consulting projects it was clear that the leadership didn’t have a clear definition of the value that each business function, support or otherwise, added. While the sales team can be measured by revenue, how do you measure procurement, finance or HR? Even marketing can be tricky: how do you separate their success from that of the sales team or others?

We decided this was an important question to ask. Each of these functions contribute to the sustainable success of the organisation, but putting simple measures on their day-to-day activity to monitor performance is hard.

Sometimes people do it, and do it well.

Sometimes people create KPIs but these measures aren’t always well thought-out or aligned to the corporate goals, let alone to each other.
For example, manufacturing might have a target for a minimum batch size, because that is what is most economic to produce. But logistics may be optimised around much smaller batches, based on what the customer wants.

Often though, people just don’t create these metrics at all. They provide individuals with a set of objectives, against which they can be measured. And they have a corporate set of KPIs to which everyone — notionally — contributes. But in the middle? There is an Objective Gap.

When all the numbers are going in the right direction, this is fine. Individuals might get pulled up for failing to hit their targets, but as long as the corporation keeps on a profitable growth track, no-one questions function-level performance.

When things start to go bad though, problems become visible. Disconnects and inefficiencies become clear. Issues that should have been identified earlier if functions were properly targeted and measured. The objective gap widens.

Sometimes these issues are internal. Like the issue between manufacturing and logistics.

Sometimes have an external effect, like the conflict between working capital and service benchmarks — another common issue. If a customer wants products quickly, you typically hold more stock of them to ensure they’re available on demand. But this requires more working capital, as well as storage space. Measure the right things at the right level and you can strike a balance, or perhaps identify the need for a more sophisticated solution. Measure just one, and you will operate to the detriment of the customer or the business.

Thanks to yesterday’s session I’m now even more clear about what value is added by this part of the Stratification template. It’s not necessarily about adding metrics. It’s about thinking more clearly about what’s already in place, filling in gaps, stripping some out, and removing conflicts.

And it’s about considering the gap between individual and corporate goals: not everyone can be perfectly aligned to the objectives of a company of tens of thousands.

But you probably can align them to an understandable goal shared with the people around them,

Posted by Tom Cheesewright on

Privacy: Dead or Alive?

I had the great pleasure of chatting to Robert Scoble at SASCon last week, and found that we held equally strong, but different, views about the future of privacy.

In Scoble’s view, privacy is dead. Services like Google and Facebook have demonstrated that we are more than happy to give up personal data in return for a service that we value.

I can’t disagree with this. But I don’t think things will always be this way. Privacy can be resurrected, and I believe that a number of drivers mean it will be.

It’s important first to define the specific type of privacy we were discussing. It might better be described as a debate about personal data: who owns it, who can monetise it, and how it is traded.

Right now we give our personal data over to large entities who store that data and broker access to it to other people for whom it has value: usually advertisers. The enormous value and profits of these companies — e.g. Facebook and Google — are based on an imbalance in this transaction: they make much more money from selling our data than they spend on maintaining the service that we trade for it.

You can argue that the data is only valuable when it is held at scale: no advertiser is going to broker with each of us individually for the right to advertise to us. By contrast, a brand’s interactions with Google and Facebook allow them to reach thousands or even millions of people with a few clicks.

I argue that this is an engineering problem. If you can allow brands to negotiate with millions of individuals without storing their data in a central location, then there’s no need for the ownership of our data to change hands in the first place.

This is good for many reasons. We might get a greater share of the rewards. And our data is likely to be more secure. Storing our data in centralised repositories makes it worthwhile for hackers to try to steal it. The friction of stealing data from each of us individually may be much to high to justify the reward.

For these reasons I think that our privacy — or rather our control of our own personal data — can be restored. The genii can be returned to the bottle. Because it makes social sense to do so, it makes commercial sense to do so, and because it protects our security if we do so.

Right now we don’t have the tools to do this: there is nothing out there that can broker personal data on a case-by-case basis. There isn’t the understanding, nor the appetite, in the general public. People might gripe about some of the more egregious behaviours of the data-holders, but for the most part we don’t stop using their services.

But our tastes are fickle. I hold to my view that no network or service online has a tight grip on its users: switching behaviours is just too easy now.

It will take time but someone — or perhaps more likely a collection of people and companies — will construct an alternative to the centralised network model that combines the benefits outlined above — including direct financial reward for sharing our personal data — with a great user experience.

And in the process, they will resurrect our privacy.

 

Posted by Tom Cheesewright on

Future Business: Friction is everywhere

Part 1: Them

Friction is probably one of my most used words. Not without good reason. All of my consulting engagements and research highlight its importance.

  • Low friction in the interaction is one of the greatest drivers of loyalty in shopping customers
  • High friction is one of the primary sources of inspiration for new start-ups
  • Friction is falling in the processes of innovation and development, inviting new entrants, products and services
  • Low friction between organisations is changing the nature of success and scale

One of the first things we do when we go into a new consulting engagement is to identify sources of friction. What’s slowing the company down? What generates unnecessary cost? What stops smoother interactions with partners?

These are some of the key factors that prevent an organisation being truly future-ready.

How high-friction is your business?

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Part 2: Us

Where this idea of friction gets uncomfortable is when we turn this spotlight on ourselves.

Having got the Applied Futurist’s Toolkit off the ground and brought on board our first few users, we’re now looking at scaling up. The first part of that process is analysing where we are today. And getting feedback.

Feedback like this:

“I really like the content on your website. But can you turn off that pop-up? I’ve subscribed already.”

Ouch.

This hurt all the more coming from someone who works for a search engine. At a digital marketing conference.

Clearly we have a lot of work to do. Which is in part why we were at such a conference.

The popup is one issue, but our analysis has thrown up many more. Over the next weeks and months we’ll be aiming to reduce the friction in our interactions with you, our readers, our users and our partners.

We may make some mistakes along the way. And we could do with more feedback. We know people don’t like the pop-up. But what else do we need to change? What would make this site more useful?

We’d love to hear from you.

Posted by Tom Cheesewright on

Future of Retail: Discovery Challenges Diversity

While preparing a pair of foresight workshops for a new consulting client, I came across what on face value is a blatant challenge to one of our five Vectors of Change: Diversity.

The Diversity argument goes that in an an increasingly connected world of globalised trade, where increasing access to technology is lowering the barriers to market entry, you will see greater diversity at every stage in the supply chain. More manufacturers, more distributors, more retailers, and a greater range of products and services flowing from one end to the other.

But this doesn’t appear to be the case in my client’s market, food. On the contrary, major retailers in the UK have been dramatically cutting their SKUs, the number of product lines and variants that they stock.

Is this the exception that proves the rule or a challenge to the very principle behind it?

Thankfully, it’s neither. Though to understand what’s happening you have to examine each stage in the food supply chain separately: each is at a different point in its evolution.

To use Deloitte’s terminology from its 2013 report on the food value chain, there are four main stages: producer, processor, distributor and consumer.

The production side of food is very diverse but in an undeveloped state. The Diversity vector was identified while focusing on developed markets where there has been consolidation and now the opportunity created by technology is driving a challenge to the established players.

It’s clear that we need to consider the position of a market segment on a timeline of development when deciding whether it’s ripe for diversification.

Looking at the UK market, producers are under pressure and as this story highlights, going under at record rates. But technological innovation is starting to show where Diversification could come from. Groups like Biospheric Studio are now producing high-grade ingredients in cities and close to their customers (mostly restaurants) using connected indoor ‘farms’. The price of this technology is collapsing and its accessibility climbing. I don’t think it’s long before it goes from maker grade to consumer grade: the ultimate diversification.

At the processor stage there’s no slowdown in the production of new products, as this article shows. This diversity just causes an accelerated shakeout of winners and losers as the products succeed, or mostly fail, when they enter the retail environment.

At the distributor level is where there appears to be an aggressive trend to reverse diversification, most extremely at Tesco, but also at other retailers and across categories. But is this about a reduction in choice? Or is it really a rather unsophisticated answer to the discovery problem?

The discovery problem is a natural consequence of Diversity: how do you navigate the variety of options? Given the cost that diversity presents up the supply chain for supermarkets, as well as in-store, it’s a natural step to try to slim down. But do consumers really want less choice? Or do they just want not to have to think too hard about which choice is right for them in the moment they are walking down the aisles? In other words, choice is great until it is hard work.

Some choices are clearly without value: no-one, I would argue, needs “three bays of air freshener.” But a gluten free biscuit option? That adds value. The consumer just needs a better way to find what is right for them, and the retailer needs to be smarter about what they stock.

Given the increasing diversity of retailers — about to grow by one as Amazon Fresh enters the market — the total number of lines stocked here in the UK is likely growing*. It’s just that individual retailers have learned that trying to be all things to all people (and taking payments from suppliers to stock their multiple lines) is counter productive.

The lesson: Diversity is real and it isn’t going away. But some approaches to tackling it can disguise its presence. And it is only in maximum effect in developed segments that have already been through some consolidation.

*This is perhaps a controversial argument given the loss of so many smaller stores in the face of the 80s and 90s supermarket onslaught. But IGD’s most recent few years of figures suggest a decline in the prevalence of the hypermarket model and a growing diversification. For example, inside the online channel is a ~£250m market for organic veg box delivery. Elsewhere there is an increasing range of ethnic food stores up and down UK suburban high streets.

 

Posted by Tom Cheesewright on

How to be future-ready

This afternoon I’m speaking about Applied Futurism to an audience of MBA and masters students at Manchester’s Alliance Business School. In preparation for this talk I put some more thought into a loose analogy I have developed for explaining agile organisations: the athlete.

Future-ready organisations are like athletes because they have three crucial characteristics that make them more able to respond to incoming trends: perception, reaction, and physical agility.

Perception

Perception is about the acuity of the senses. The ability of athletes to see, hear and sense the environment around them, and the position and state of their own bodies, better than the rest of us.

Future-ready organisations achieve this in a number of ways. They have smooth, slick data flows into and through the structure of the business, routing relevant information to the right people, fast. And they have formalised processes for horizon-scanning, keeping a watching brief on new trends and pressures and feeding this into their operations.

Reaction

Reaction is about the ability to translate the input from the senses into a response, fast. Making rapid decisions about how to respond and driving that decision out to the relevant parts of the body.

For organisations this is about the deeply interconnected processes of planning and communication. Future-ready organisations understand the impact of external changes on their key audiences — staff, shareholders, customers and partners. They can build and communicate a response quickly in a format that compels action.

Physical Agility

Of course the greatest perception and reactions are worth nothing in an athlete without the physical agility to translate plans into real action. Athletes, like organisations, need to be fit.

A fit and future-ready organisation has well defined muscle groups, just like an athlete. It’s clear which parts of the organisation perform which functions. Their inputs and outputs can be clearly understood and measured.

Training the Greats

Like great athletes, future-ready organisations rarely develop on their own. They are surrounded by a team of trainers and professionals who help to keep them on course, developing every part of their capabilities to maintain a high-functioning whole.

With the Applied Futurist’s Toolkit, we are trying to fill in the gaps in this training regimen for future-ready organisations. To equip an army of professionals with the tools to transform their clients into athletic specimens who can build and sustain success over the long term.

That’s why speaking to an audience of MBAs and masters students is so exciting: these are the Applied Futurists of tomorrow.

 

Posted by Tom Cheesewright on

When ‘innovation’ is a euphemism for ‘change’

At the Propteq conference yesterday, someone asked a great question: “What is innovation?”

It’s not a new question of course. Whole treatises have been written on the subject, by Clay Christensen and others. But it remains a huge subject of debate, especially within large, long-established companies.

For these companies, innovation is often a euphemism for change.

Leaders like innovation. Innovation is safe. It’s positive. Innovation means handing over an already-empty floor of their underpopulated offices to an accelerator programme for start-ups. Innovation means renting a space in Shoreditch and filling it with some of the company’s brightest young things.

This sort of innovation is something that happens at arm’s length. It looks good but it doesn’t require fundamental change in the company or the people who lead it.

It’s smartwash.

Real change is scary and difficult. People don’t like to talk about change.

If they talk about it, they might actually have to do it. So instead they talk euphemistically about ‘innovation’. And this drives a very different behaviour. Instead of tackling the real problems at the core of the business, they skirt around them. They create some high-tech window dressing.

This is the type of behaviour that sees major corporations sleepwalk into disaster.

 

Tom Cheesewright