Change is All Around US Series – PT 1. Technological Change – Identifying, Adapting and Optimizing

Robot with wooden puzzle“On their own, AI, platforms, and crowds are all transformative forces. That they’re evolving in parallel means we’re beginning to experience a new era of networked disruption, where productive but disorienting change becomes the status quo. For citizens, entrepreneurs, companies, and governments that want to successfully navigate this new world, the first step lies in finding reliable and prescient guides. Andrew and Erik are two of the best.”
Reid Hoffman, partner at Greylock Partners, cofounder of LinkedIn, and coauthor of The Start-Up of You

Machine. Platform. Crowd.

This is the title of a provocative new book describing the three areas of emerging technology that are fundamentally changing the world that we work and live in.  Andrew McAfee and Eric Brynjolfson’s newest work “Machine, Platform, Crowd: Harnessing our Digital Future” (MPC) outlines a future in which artificial intelligence impedes on human intelligence, platforms usurp brick and mortar businesses and the wisdom of the crowd becomes our guiding light.

MPC is an enchanting new look into the future and details the three areas of technology that are on pace to shape our digital world.  The section on “Machines” focuses on the emergence of artificial intelligence, machine learning (derivative of A.I.), neural networks, and robotics.  MPC’s second section is devoted to the “Platform” and the ways in which platform technologies such as Amazon, Uber, and AirBnB’ have changed the nature of business.  Legacy, mega-businesses use to include a large infrastructure footprint and millions of workers.   Platform businesses now involve only a website and a gaggle of software engineers.  The third area of the book touches on the way in which crowd sourcing is quickly becoming a dominant analytical methodology.

MPC builds on a host of recent academic and popular journal articles cataloguing the pace at which breakthroughs in game-changing technologies are transforming everything from manufacturing floors to cancer diagnosis.  Indeed, McKinsey and Company recently released an excellent primer on the topic of A.I. in the workplace in the McKinsey Quarterly Journal.

The question for young and old leaders alike is —  how do we prepare for a future in which these new technologies completely uproot legacy business models?  How do we take advantage of the productivity and cost savings that automation yields without replacing our co-workers and employees?  How can these technologies be integrated into our current service offerings to provide newfound value to clients or do away with obsolete products?

Building on the questions that Andrew and Eric ask at the end of each chapter,  I have outlined two fundamental questions that leaders should constantly be asking themselves and their businesses in order to keep up with the breakneck speed at which entire markets are changing.

Tactical Question ( this question should be asked with high frequency; weekly or monthly basis)

  1. Could the integration of machine learning, big data analysis, cloud computing, “platformization”, or crowd sourcing improve the quality, increase the speed, or reduce the costs to my discrete business function or department?

While each of these technology areas above are broad and relatively complex, each has derivatives that may be incorporated into a current business process with a moderate amount of ease.

Strategic Question (this question should be asked on yearly basis: strategic planning process or quadrennial business plan review)

  1. How could Machine, Platform, or Crowd offerings from competitors significantly erode profits or replace my business all together?

Business author Jim Collins famously coined the term “Productive Paranoia”, a phrase that encourages healthy  paranoia about the ways in which competitors and changing markets could be harming your business.  In the same way, we must now deliberately add these three technologies (and their sub-technologies) to our purposeful paranoia.  For example, could a competitor deploy a machine learning algorithm to the way they sell insurance products  to reduce claim payouts and maximize premiums?  Could a rival grocery store move significant operations from it’s traditional stores to an on-demand e -commerce model?  As we conduct strategic planning exercises and go through the scenario planning process, it is imperative that we now add these new frontiers in technology to the way we plan in 1,5, and 10 year cycles.

It is clear that MPC technologies are having a dramatic impact on the world that we live in.  We have quickly moved from an analog world to a digital world with the speed of disruption increasing at a rapid pace that can be hard to realize until you find yourself (and your business) completely overcome by it.  We must acknowledge that these changes are powerful, can be profitable, and are here to stay.  If we are to prevent them from reducing our bottom lines and use them to our build our businesses, we must constantly be asking how they can be incorporated into our everyday processes and embedded into our long-term strategies.