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Posted by laura on

Watch your edges

Watch your edges

How do you define the edge of your organisation or any unit within it? The fourth of the five effects of technology-driven change that I’ve noticed is the softening of the edges of every scale of organisation.

The falling friction in our interactions has meant that for many operations we no longer need to be co-located. The obvious effect of this is a more flexible and mobile workforce. But not only can the workforce now be on the move, or even located elsewhere in the world, they no longer have to be part of your organisation at all.

Relative friction

We’ve always had outsourcing, of course. But the relative friction involved in sourcing, integrating and, if necessary, ending and replacing, partners is so much lower now. We can pick up freelancers for a single job. Integrate someone else’s technology stack with a few lines of code — and replace it if necessary, without needing to rebuild.

Watch the interfaces

The key points to watch in this trend are the interfaces. The online marketplaces for freelancers. The APIs for software stacks. The systems and processes — face to face and electronic — for communication between organisations and their partners, or internally between departments. Get these interfaces right and you can achieve great things: high efficiency, good transparency and happiness on both sides. Get them wrong and you will be left at a significant disadvantage, held back by excessive friction.

Of course, some organisations like friction. It’s how they make their money. But that’s a story for another day…

 

Posted by laura on

Acting faster on information

Acting faster on information

 

Agility is about being able to receive signals and make strategic change. But it’s also important to be able to receive, process and act on information quickly at an operational level. This is increasingly the expectation of customers and partners. Being able to do so reduces your risk with shareholders and regulators — you are always ready to respond.

There are two approaches to improving performance. One is to speed the flow of information through the organisation. The other is to push power to the edge, closer to customers and partners. I’ve seen examples of both approaches in my work.

Push power to the edge

In retail it’s increasingly common to push marketing and merchandising decisions out to the edge of the organisation to allow rapid response to market changes and opportunities.

I’ve seen this a lot in the research I’ve done with Salesforce Commerce Cloud.And elsewhere — take, for example, the response of LIDL to the departure of Zayn from One Direction. According to its submission to the UK Social Media Communications awards (of which I am one of the judges), it received the news through its social media team, organised a response, and then shared that response in a matter of minutes . Since 20% of the band had left, they wiped 20% off the price of One Direction Easter eggs. A neat and effective response that won them an award.

Accelerate information flow

One of the most interesting areas of development within the business right now is — perhaps surprisingly — finance. Finance was the birthplace of corporate IT, and yet all the action in recent years has largely been around marketing technologies. Now though, finance is catching up.

The work I’ve done with Prophix on the future of finance has shown that there are many organisations starting to leverage technology to accelerate the flow of information through their business with finance acting as a hub for this information, providing the tools and skills to collate and process and share value across the business.

In the process, the time-lag for information coming from and through finance has been cut from weeks, to days, to — in some cases — hours. With better historical information people can also project forward much more usefully.

Either way, act faster

In some ways the approach you take to accelerating your response doesn’t matter. The reality in any complex business is that it will likely require a combination of both. But you have to find a way to stay in sync with the market and environment around your organisation. And since those are getting faster, so must you.

Posted by laura on

Engineering adaptability

Engineering adaptability

 

What does accelerated change mean for organisations? Accelerated adaptation. Or put another way, agility.

Agility is an over-used word in business these days. The perceived sexiness of agile development methods spilled out of the product labs and the IT function and into the rest of the business. It’s a useful word but you have to define what you mean when you use it outside of those product or project contexts.

Perhaps it first makes sense to define what it means in those contexts. Here, agile development is about formalised alternative approaches to the classic ‘waterfall’, where all possible requirements are captured at the start of a project and then development continues until those requirements are met. Agile approaches are instead iterative, testing requirements with the customer at every stage. This avoids long product builds where the end result has either diverged from the customer’s original (or real) need. Or products that become less and less fit for purpose over the life of the project.

Organisational agility

In a broader organisational context, agility is about the ability to change rapidly in response to a variety of signals. Agile methods may be part of this response but this is really about the capability of the organisation to receive those signals, process them, and act on them quickly.

For clarity, that’s three clearly different capabilities that I’ve defined before:

  • The antennae to detect change signals from inside and outside the organisation and particularly from adjacent spaces — often blind spots from which the most serious challenges may come
  • The ability to process this information and build a response plan rapidly, gaining assent from, or at the worst compelling change in, the relevant parts of the organisation
  • The flexibility to act on that response plan at speed

Change signals

Examples of signals that might trigger this chain of responses include:

  • Internal functional failure or degradation
  • Accelerated direct competition
  • Adjacent market competition
  • Customer channel shift
  • Collapse of product or service relevance

I’ll break those out in more detail

Internal functional failure or degradation

How fast could you rebuild one of your core business functions if it appeared to be failing? How much disruption would it cause? How would you know it was failing in the first place?

I haven’t worked with an organisation where one or other unit wasn’t failing the rest. But they often don’t know they’re failing and nor do their managers — at least, they can’t prove it objectively. They don’t have the benchmarks against which to measure the performance of procurement, finance, HR or IT teams.

That’s not to say they don’t have some metrics in place, but these metrics are usually operational and based on a historical idea of how that unit should perform. They don’t measure its contribution to the organisation’s wider goals.

This isn’t easy. Part of the problem is often a disconnect between what these functions think their role is and what it should be for the long term health of the organisation. Only with a proper alignment of expectations and measurement built around those shared expectations will you ever get a signal that something is wrong.

Accelerated direct competition

The most obvious form of signal is direct competitors applying the accelerating effects of technology to overtake. But this is perhaps the rarest example I see and the one for which most organisations are reasonably well prepared. They are focused on the rear view mirror, so see these organisations approaching in the outside lane.

Adjacent market competition

This is the blind spot. The one that people don’t see coming until it’s too late. Or that they are too arrogant or ignorant to acknowledge. This is the Netflix vs Blockbuster battle. Kodak vs digital (and now the rest of the camera industry vs the smartphone). It’s HMV vs iTunes or Yellow Pages vs Google.

Customer channel shift

The way customers communicate with their suppliers, and buy from them, is changing.

Case in point: a couple of years ago a friend asked me to speak with the MD of a small-ish (a few tens of millions) manufacturer. He was about to push the button on a new website costing a few tens of thousands — perceived as a big investment for him. He had cold feet and wanted to check his strategy before paying out.

I looked at his business — selling to service providers, retailers and manufacturers — and asked him a few questions. One of the first was “Do you sell on Amazon?” He got quite annoyed at this point. “You’ve got the wrong end of the stick. We only sell to other businesses.” I convinced him to bear with me and go onto Amazon’s website, and type in some keywords related to his products. “Oh shit,” was his response, or words to that effect.

To his surprise (though obviously not to mine), his competitors were already selling their wares there. More to the point, his distributors were selling his products there. And he had no idea.

Collapse of product or service relevance

The lifespan of products is getting shorter and shorter. Take the ‘hoverboard’ for example. In the space of six months it went from appearing under the feet of celebrities and costing the thousands, to being a huge phenomenon (and costing hundreds), to being effectively banned from the streets, killing the market.

Monitoring such rapid rise and fall in relevance is a challenge.

Posted by laura on

More supply, more channels, more competition

More supply, more channels, more competition

Technology connects and enables. With an internet connection and a cheap device I can source supply, set up a channel to market, and fulfil all my legal obligations as a new business in a matter of hours.

The only thing I can’t do (in the UK at least) is set up a business bank account, but even that will get there eventually.

Fundamentally it’s easier to connect the dots than it ever has been, so more people do.

People start new businesses of their own. The number is perhaps inversely proportional to the ease (including the capital cost) of setting up: just look how many freelancers/agencies there are now. But in just about every sector I’ve looked at, whatever the barriers to entry, there are more players because those barriers to entry are falling.

Extending reach

People also extend their reach, across physical borders and up and down the value chain. If they sold only locally, they start to sell nationally and internationally. People who sold through channels start to sell direct. People who were customers start to explore building their own services or supply. The low cost of access to new channels enables peoples to discover and explore new verticals and niches, bringing their flavour of competition to markets that might have been closed in the past.

Proliferating channels

And all the time the channels to market themselves are proliferating: web, mobile, social, gaming. Endless television channels, both on and off line. Print hasn’t died and yet its ‘replacements’ number in their millions.

I’ve seen this trend in one form or another in just about every market I’ve examined. I call it Diversity, one of the five vectors of technology-driven change. I’ll be writing about the other four in the next few posts.

Posted by laura on

Acceleration isn’t the only effect of technology

Acceleration isn’t the only effect of technology

It’s an idea you’ll hear a lot. An idea that has many subscribers, and just as many critics.

I subscribe to my own version of the theory. In short, I believe that change driven by computing and the internet will prove to be as great or greater than that driven by the shift from horse and cart to car, or the advent of domestic automation technologies like the washing machine. But we don’t yet have the historical perspective to say so. If it is greater, and happening over a similar or shorter period, then grand-scale change really is happening faster now.

In the mean-time, what we are seeing is an accelerated rate of change at smaller scales. What I call high-frequency change.

This accelerated rate of change is forcing organisations to adapt faster than they have needed to before. Or face the consequences. The now-cliched collapses of the major names, from Nokia to Kodak, Blockbuster to HMV. And the many less-well-known businesses. The SMEs and regional employers that have fallen by the wayside due to an inability to maintain pace.

A lack of agility.

Developing greater agility is one of the key requirements placed on organisations by technology’s advance. But it isn’t the only one. In every sector I’ve looked at in the last five years I have seen technology have the same four other effects.

Diversity at every link in the value chain

By lowering friction and barriers to entry, technology introduces many more options at almost every link in the value chain. More suppliers, more channels, more competition, more routes to the customer.

Accelerated information flow

The lowered friction also applies to information flow: you can, and arguably need to, know more about your customers and environment now than before. Failing to collect, analyse and act on information fast places you at a distinct disadvantage, in every aspect from pricing or personalised marketing, to stock trading or the supply chain.

Technology is ubiquitous

Technology itself is advancing in performance and declining in price at such a rate that it is finding new applications at an incredible rate. In spaces where it has been dismissed it is becoming relevant. In places where it was always too expensive to be viable, it is becoming cheap enough to be disposable.

Borders are falling

Counter to the prevailing political trend of rising barriers to trade and movement, technology is forcing barriers down. Companies and communities are increasingly global. Operating in this environment increasingly requires a network mindset rather than a conglomerate approach.

Together with the drive for greater agility, these effects are what I call the five vectors of technology-driven change.

Posted by laura on

When driving faster, look further ahead

When driving faster, look further ahead

The faster you’re travelling, the further ahead you need to look. When we get behind the wheel of a car, we all do this automatically.

But we don’t seem to do it in business.

The reality is that all of us in business are travelling faster now. We may not notice it. The effects are subtle. There are no trees whizzing past the window to give us the impression of speed. But it’s there. Information flows faster. Disruption happens quicker. You can see it in everything from the speed of the delivery to your door, to the turnover on the stock market.

This places an imperative on every business leader to look further ahead. Not necessarily at the far horizon — the rate of disruption is so great that it is further clouding that already-unclear picture. But certainly beyond the next quarter or year.

Expand your field of view

Not only do we have to look further, we have to expand our field of view. To return to the driving analogy, we’re not on a long, straight motorway. We’re crossing a constant stream of intersections. Industries are colliding at an unprecedented rate. The threats to the safety of our journey do not come from our competitors coming up behind us. They come from the unexpected entrant to our lane, veering in from elsewhere.

Few — too few — leaders have gotten to grips with this new reality.

From a vision to a mission

I confess a level of self-interest here. This is what I do. I help businesses to see the future and expand their field of view. It’s called Applied Futurism. I’d like to do it for you. But even more, I’d like you to do it for yourself.

Because this belief in the need to look beyond has gone beyond a business proposition. It has become a mission.

I genuinely believe the way that most people do business now is broken.

Firstly, we spend far too much time worrying about our competitors. To return again to my driving analogy, this is like watching your rear view mirror instead of the road ahead. You’re so focused on who might overtake you that you miss the turning that could put you on a much faster route.

Secondly, we spend all our time focused on incremental improvements when there’s an existential threat around the corner. This is like concentrating on your fuel economy when there’s a crash in front of you. It doesn’t matter if you’re doing a few more MPG than your peers if you’re all headed for a pile-up.

Be a futurist

I can’t fix every business. But I can share what I’ve learned in the last five years, working with organisations around the world to address these problems. That’s why I now license my knowledge to consultants and business leaders, so that they can address these problems in their own businesses and those of their clients. And I teach the tools I I’ve created to professionals on one-day courses at the University of Salford.

In fact, we’ve just announced new dates for the course. You can find out more about the course at http://www.salford.ac.uk/onecpd/courses/futurism-for-business. And if you’re interested in the tools, check out http://futurism-tools.com.

Whether you choose to use my tools or not, I’d urge you to do this: next time you get in the driving seat of your business, stop and look up. Look ahead, not one year but two, three, five. Look around. Look to your left and to your right, at your customers, at the businesses you interact with at home and think: what could these people, their processes, their technologies, do to my industry and my business?

Look ahead and then act. Make change. Steer around that potential crash. Be the first to take that new route.

 

Posted by laura on

Why you need to be a storyteller in business

Why you need to be a storyteller in business

Have you ever met someone so charismatic that you could watch the room light up in response to their presence?

I have, and it was in a pretty unlikely scenario.

My first job was working for a marketing agency for tech firms. One day in the early noughties we went to pitch to take over the PR account of a medium-sized US tech firm. No-one you would have heard of, unless you worked in that area.

It wasn’t the biggest account, but it wasn’t the smallest either. Worth having, so we were well prepared.

I remember there was an unusually large number of people in the room. Normally when we pitched, it was to maybe two or three people from the marketing team. This time it was five or six, plus our team of maybe four, so most seats around the board room table were full. Except for the head of the table, because we were waiting for the MD.

While we waited, we did the usual, slightly forced but nonetheless good-natured, small talk.

Then he walked in, and the effect was dramatic. You could watch the people who worked for him literally light up. It was like flowers turning to face the sun. And the effect was infectious: you couldn’t help but pick up on this incredibly positive vibe that his staff clearly got from working with him.

What he did next gave me some clue as to why people loved working with this guy. In a few sentences he quickly brought the meeting to order and explained why everyone was there. He explained why they were looking for a new agency and enthused about the business with great passion.

When he was done, we really wanted to work with them.

It was an unsexy, medium-sized technology business that most people would never recognise. But when he’d finished telling the story of where they were and where they wanted to be, it felt like we would be working with Apple.

We didn’t win the pitch.

I can’t say I remember many pitches apart from the absolute disasters. The one where I crashed my car on the way over. The one where the client immediately and vocally hated the central theme (my idea). The one where the prospects barely said two words and just stared at us for about 40 minutes.

This one stuck with me. What I learned was not just the power of charisma but one of the tools that underpinned it: great storytelling.

My job? Telling stories

In retrospect, a lot of my work has been about storytelling.

When I worked in marketing it was about taking a product — usually an unsexy tech product — and building a story around it that gave it context and appeal to its target audience. I spent quite a lot of time travelling around Europe helping others to do the same, teaching resellers and systems integrators for one of the largest tech firms to do their own PR.

These days, I help to explain big tech stories to the public for the BBC and others by building a narrative around what has happened. And most importantly, I build stories about the future for clients, whether that’s in reports, consultations, or presentations.

Because I do this a lot, a few years ago I tried to formalise the process. How do you tell a story of tomorrow? I realised there are a few key ingredients to a great story — ingredients that my charismatic tech boss understood very well.

These ingredients have been described so many times in so many ways — perhaps most simply and memorably in Kipling’s Six Honest Serving Men. But I think of them as Audience, Context, Action and Impact.

Audience

Stories are different for every audience. The starting point for every story — at least in business — has to be the audience. Who is listening and what will their reactions be? What do they care about?

Context

My old boss described this as the view from your audience’s window. You’re about to tell them that something is happening. Something they don’t know about — maybe shocking. If they’re going to buy what you’re telling them, you need to ground it in their context first.

Action

In PR we used to constantly ask “What has changed?” If nothing changes then there is no story, just a sketch.

Impact

Action without impact is an unfinished story. Impact is “What happened next?” Or in my case “What will happen next?”

These are the fundamental components I use when building reports, presentations, articles about the future. They’re all part of the Arcs framework for narrative planning — itself part of the Applied Futurist’s Toolkit. This also includes templates to apply these components, whether you’re writing a report for the board, a piece of content for marketing, or a business strategy.

 

Posted by laura on

Will your strategy survive its first encounter?

Will your strategy survive its first encounter?

“No plan of operations extends with any certainty beyond the first contact with the main hostile force.”

So said Helmuth von Molke, in this often contracted and misattributed quote. He also said this:

“Strategy is a system of expedients; it is more than a mere scholarly discipline. It is the translation of knowledge to practical life, the improvement of the original leading thought in accordance with continually changing situations.”

It sounds to me like Helmuth von Molke was an early proponent of agile thinking. I think he would have liked the current meme phrase “Life comes at you fast”, usually attached to pairs of Tweets showing someone having to radically revise their opinions in the face of reality.

Destination and Action

Strategy defines how you’re going to get where you want to be. How you’re going to achieve your vision and mission. But to pursue the military analogies, strategy can only ever provide you with the rules of engagement. Even with the most rigorous long-term foresight programme, you’re going to be frequently surprised.

Your strategy cannot tell you what to do in each encounter you will face along the road to your destination. Only provide guidance on how you approach it in a manner consistent with your vision and mission.

Near-term foresight

It is much easier to respond in a consistent manner when you see surprises coming a little earlier. They will still be disruptive to your direction of travel, but every week or month of additional time you have to deal with them gives you that bit more control over the response. It may still be reactive but it’s a controlled reaction.

This is why I advocate every organisation running a low-overhead short-term foresight programme as well as looking further out. Imagine driving by plugging a destination into the GPS and then shutting your eyes and following the instructions. It sounds ridiculous but I’ve seen too many organisations behave like this, bouncing off bollards as they blindly pursue a course.

Will your strategy survive its first encounter? You have a much better chance if you see it coming, rather than being ambushed.

Posted by mason on

What makes bitcoin appealing?

The bitcoin world is in disarray. Again. Although total disaster seems to have been averted for now, the value of a bitcoin has swung to highs around $3000 and lows around $1800 in recent weeks.

This is the behaviour of a pure investment instrument, not a stable global currency alternative, which is what I hope at least one cryptocurrency will one day become. That said, the value of the pound hasn’t exactly been stable recently.

The disaster I spoke of is a split in the community over the need to make technical changes to speed transactions and cut their cost. Today, the network can process a maximum of seven transactions per second and at a cost per transaction of around $0.83. This is a long way short of the processing rate of a global currency alternative, and too expensive to fulfil its promise.

But, put this into context. If I use my debit card on the Visa or MasterCard networks while travelling, on top of the 1–3% fees paid by the seller for taking the card transaction, I pay 2.75% plus up to £1.50 in transaction fees.

This is a huge overhead on the movement of money for consumers and businesses in our current system. And it’s why I’m interested in a global currency alternative that replaces it. Imagine bypassing the banks, not because you are a criminal — the only bitcoin users often reported on by the media — but because the tax on transactions created by a sclerotic and over-centralised financial system is pretty criminal in its own right.

If bitcoin or one of the other cryptocurrencies can fulfil its promise, there will be no more minimum spend for card transactions. No more 50p charge for using a card at your corner shop. In theory a crypto transaction could cost around 1p and it would be the same for every size of transaction — no more percentage fees either.

There will still be exchange rates, at least for the time being, as we trade back and forth between our own national or regional currency and whatever crypto wins out. But how long will that even last, if the crypto currencies can fulfil their promise.

Posted by mason on

What will we do in the future? Explore.

It’s an oft-quoted fact that we know more about space than the seas. With some qualification (it’s only true of our known and accessible region of space) it’s an accurate and shocking statement. But the seas aren’t the only unexplored territory within our reach.

The reality is that we know very little. Our knowledge of our planet, our bodies, minds, and fellow inhabitants of earth may be vast compared to just a few decades ago. But it remains vanishingly small when measured against the ‘known unknowns’ we can already identify, let alone the ‘unknown unknowns’.

Short term pessimist, long term optimist

When people ask me how I feel about the future, I’ll usually answer that I’m a short term pessimist and a long term optimist.

I find it hard to see how we will crack the challenge of a polarising economic system, where automation seems set to drive a greater wedge between rich and poor, without serious disruption and difficulty. Or how we will avert at least some level of major catastrophe from climate change — a catastrophe that is arguably already happening.

But I believe we will ultimately overcome these challenges. Humanity, and society, will adapt and overcome.

When you get past the doom and gloom, you get to the fun question: what next?

For me the answer is rather Roddenberry-esque. We boldly go.

An inquiring species

We are curious by nature. Tempted by the untravelled road and the unanswered question. If we can solve our economic and ecological problems, perhaps we can turn ourselves to philosophy — literally ‘loving knowledge’.

The much quoted stat that 90% of the world’s data has been generated in the last two years implies that we are already learning at an accelerated rate. Yes, a lot of this is cat pics, but there are also huge advances. Every day, we understand more about our world and our selves. Imagine how much faster this acquisition would be though, were it not for the other distractions that consume so much of our time today — big and small, from wages and war, to selfies and shopping.

Of course, as Aldous Huxley put it, we have an “almost infinite appetite for distractions” — a subject addressed by James Williams in his recent RSA talk. It may be true, as he suggests, that willpower alone may not be enough to keep us focused on the things that really matter.

Personal hunger, or societal goals?

If this is the case, then is our post-crash learning utopia one of free-roaming enquiry, or is it one where learning is an expectation? Where we are free to follow our interests, or where there is a structure of incentives — and perhaps the opposite — to keep people focused on growth and advancement?

Perhaps this doesn’t sound like a utopia at all. It certainly has a whiff of Soviet-era communism about it. But nice as the idea of total freedom sounds, in reality I think we are perhaps at our best when we have shared goals and objectives. When, with a large degree of freedom, we are encouraged to collaborate on achievement.

From the moon to the microcomputer

I thought about this twice recently. First, listening to Brian Cox and Robin Ince speaking to a panel of astronauts on The Infinite Monkey Cage, and being reminded just how incredible were the achievements of the Apollo programme and the International Space Station.

Second, speaking to Andrew Back from the Wuthering Bytes festival, for my own podcast. We spoke about the open source hardware movement and how a global collection of academics and enthusiasts have built a totally open processor architecture that is increasingly competing with the big names. Because it is royalty-free, it could further drive down the cost of computing — already incredibly low.

Given a goal, and encouraged to collaborate, we are very good at turning unknowns into knowns.

Tom Cheesewright