This post references my recent presentation at Startupfest, Montreal. I’ve been studying the future of work for a number of years and it’s now come full circle in an environment and among business leaders who are more accepting of what’s in store in the coming decades and what they need to do to survive.
Currently, we live in this world of imbalance. Do you remember when business had a strong influence on how the markets behaved? We’ve seen this decline over the past few decades and business is being held hostage by their own doing. These corporations built these infrastructures based on markets that were predictable and environments that were relatively stable. The tables have turned and today markets are moving at a speed where business is struggling to keep pace. I’ve seen firsthand how technology has wielded its way into the marketing and media sector. It changed the way people consumed information, how they interacted with each other and how they bought. At the same time, it has obsoleted the very practices I’ve known be true.
Look at what’s happened in the last year alone: This digital disruption in retail has witnessed at least 21 U.S. retailers filing for bankruptcy protection in 2017 including Toys R Us, The Limited, and Payless. We have seen the demise of Sears in recent months. The move to digital channels has been steady but incessant. Also, consider the changes within the $7.6 trillion global travel and tourism sector that necessitate continuous iteration of current business models. Because of Airbnb and Uber, which have, respectively, booked on average 100 million room nights per year and 40 million rides per month, pronounced shifts within this industry are happening today. At the heart of all this disruption is the explosion of adoption at the consumer level. The consumer is digital.
The most dangerous phrase … is: “We’ve always done it this way”
The way it was DONE could no longer be the way it WILL Be.
Consider the time it takes for a new product or technology to reach a significant milestone in user acceptance. It took the landline telephone 75 years to hit 50 million users. It took airplanes 68 years, the automobile, 62 years, and television, 22 years. Today, disruption is the new normal. Look at the impact of technology since the year 2000. YouTube, Facebook and Twitter were able to capture 50 million users in four, three and two years, respectively. These are nothing when compared to Angry Birds, which took a mere 35 days to reach 50 million users.
Creative destruction is moving at an accelerating pace. By leveraging the same systems, the same processes, the same best practices from legacy businesses to the predict market behavior, business will continue to chase the market and miss enormous opportunities.
Imagine a world in which the average company lasted just 12 years on the S&P 500.
A gale force warning to leaders: at the current churn rate, about half of S&P 500 companies will be replaced over the next ten years. The 33-year average tenure of companies on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027.
Over the past five years alone, the companies that have been displaced from the S&P list include many iconic corporations: Yahoo! Staples, Dun & Bradstreet, Safeway, and Dell.
The environment is dictating how businesses organize
We have to consider the trends and what may seem like sustainable developments within the current environment, the interplay of technology and opportunity which will impact the way markets think, the way they behave and what they will expect. Four rising factors that will impact business include:
- Urbanization: Throughout the world, urban populations are growing much faster than rural populations. Today, cities occupy just 2.6% of the earth’s crust, “but are home to more than 50% of the world’s population, generate more than 80% of the world’s GDP and use 75% of the world’s natural resources.” By 2030 60% of the world’s population will live in urban areas. This will have significant implications on demand for the world’s resources. It will also create an increased service economy and bring with it, more complexity. The growth of cities will mean consumer expectations will not wane. They want things fast, easy, convenient, and affordable
- The Gig Economy: By 2030, 43% of the workforce will be freelance. CEOs will need to encourage their organizations to adopt agile workforce strategies to meet the rapidly changing skills market. Increased competition will force companies to lower costs while improving productivity, which will mean they will hire for tasks vs headcount. To remain competitive, this idea of permanent workforce will not prevail. This will come at a time when workers will be interested in adopting more flexible working arrangements because it will grant them greater control, growth and even job security. The “liquid” workforce will also compel employers to continuously train staff and move them around the organization as needed.
- Social Responsibility: Consumers in developed economies are becoming more value conscious and this is putting more pressure on companies to find ways to do more, and to do better. The buying model has shifted. The reputation of a company is now highly correlated with revenue. Employees will also weigh in and their collective voices will be more pronounced. Implications for employee retention will be profound as it is today. A study from Accenture for the World Economic Forum showed when there is a high level of trust in a company, it attracts new customers and strengthens existing ones. A high level of trust also makes employees more committed to staying with the company, and partners, and more willing to collaborate.
- Transparency: If the Cambridge Analytica and Facebook data leak taught us anything, consumers are better informed, have higher expectations and demand much more transparency in how their information is being used. Trust becomes an important value in privacy and ethics, especially when data becomes the engine that drives many of tomorrow’s decisions. Mary Meeker references this Paradox of Privacy, where organizations seek to leverage personal information to provide more customization and, at the same time, are increasingly scrutinized in how they use the information. This is the first time the consumer is being given control over their own information. This wild west of rampant experimentation that created opportunism in business and in politics, at the expense of the individual, is over.
As Dave Gray, Author of the Connected Company pointed out,
“Business requires dismantling of its precious infrastructure”
New Mindsets: New Organizational Structure
The way business organizes today is through process and hierarchy. There are only a few people at the top. The work is divided and everyone gets their box in which they work. Rules ensure all decisions are run up the flagpole. The industrial revolution created this structure as well as a system of disseminated accountability. It was easy to hide behind your job description and claim, “It’s not my responsibility”. The division of work created these silos that stifled information sharing and ultimately, the speed of decisions.
Business 3.o must be:
Make no mistake – companies will be judged by their customers, their employees, their partners and their investors. How business innovates around these constituencies will determine their longevity.
What has been around for decades but hasn’t been as pervasive is this notion of self-management or HOLACRACY. This was developed through an agile methodology, which advocated the workflow. This allowed engineers to develop ideas without managerial direction. This “Fractal System is a complex, non-linear, and interactive system” and adapts readily to a changing environment. These systems are characterized by the potential for self-management especially in environments where balance does not exist.
So while the core functions are contained at the center of this org structure, including the policies and standards of the organization, the outer layer contains these pods of excellence, which allow for rapid experimentation, more fluid collaboration and where the members have direct accountabilities to the work unit. The individuals within these independent units are empowered to test, build, deploy, measure and iterate much more quickly than if they worked within today’s hierarchical structure.
Business Must Design for Ambiguity
…where complexity and uncertainty are the rules. Three strategies that respond to this environment include:
- The Perpetual Learning Organization – Digital business requires companies to act and respond faster than they ever have before. While modifying the current communication and decision making structures will enable this, the widening business-to-market gap will mean closing the skills and knowledge gap between employees and a marketplace facing continuous change. This requires organizations to embed learning management systems to bring employees up to speed on market trends, to train and re-skill them on new technology, to encourage participation in new product development, plus modify job roles so they evolve with the new technology. This will create an expectation of life-long learning within the culture.
- Design Thinking – This is a strategic practice that radically changes the mindset of an organization from “static to fluid.” At the heart of this approach is to solve problems that are human-centered. In addition, collaboration is required cross-functionally to determine the impacts on all parts of the organization. Rigorous data collection is required at all stages to ensure thorough identification of impacts to workflow and functional requirements. The focused group is created to speed up the process of innovation, get the required feedback and make autonomous decisions. This method will discover redundancies in the current systems, but will also allow strengthening collaboration as employees within these groups will be much more energized to collaborate and own their solutions. Projects will be able to go into production much faster as long as there is accountability and validation at each stage. This methodology fits squarely into the holocratic organizational strategy that ensures functional participation and empowers accountable experimentation and deployment.
- Privacy by Design – Data will drive everything in this century. Slowly boundaries are being severed between countries and organizations to contextualize information for the purpose of gaining increasing insight. What is also clear is the rise of the General Data and Protection Regulation (GDPR) that is telling organizations to slow down and put into place, standards and policy for the responsible collection, use and aggregation of information. Privacy by Design was developed by Dr. Ann Cavoukian, a 3-term Privacy Commissioner in Ontario. In the 1990’s, Cavoukian conceived of this idea to address the growing “systemic effects” as communication and information technologies integrated within increasingly networked data systems. When companies in the future are faced with petabytes of data being streamed from multiple feeds, there will be a mandate to explain model outputs. As well, functionally embedding privacy that is fair and moral into each layer of our systems will be required. Defining “fair” and “moral” needs to be functionally explicit. Continuous audits for fairness within systems and practices will also be required. The patterns that algorithms will detect will create opportunistic tendencies. This quote from an executive at Salesforce at a recent conference summed up nicely how business should respond: “Just because you can, doesn’t mean you should”. As we marshall into more disruptive technology using data, business will need to understand the long-term implications for the society at large.
This is the future of the “long-lived” company:
Connected companies learn and move faster, seize opportunities and link to a network of possibilities to spread their influence. ~Dave Gray
The future of work means destruction of silos. The panacea is a more fluid organization where decisions are made at the edges, where the business is in sync with its market, and where business perpetuates a value system that keeps it humming nicely.
Please reference the presentation here.
This post originally appeared on Forbes.
Hessie Jones is the Founder of ArCompany advocating AI readiness, education and the ethical distribution of AI. She is also Cofounder of Salsa AI, distributing AI to the masses. As a seasoned digital strategist, author, tech geek and data junkie, she has spent the last 18 years on the internet at Yahoo!, Aegis Media, CIBC, and Citi, as well as tech startups including Cerebri, OverlayTV and Jugnoo. Hessie saw things change rapidly when search and social started to change the game for advertising and decided to figure out the way new market dynamics would change corporate environments forever: in process, in culture and in mindset. She launched her own business, ArCompany in social intelligence, and now, AI readiness. Through the weekly think tank discussions her team curated, she surfaced the generational divide in this changing technology landscape across a multitude of topics. Hessie is also a regular contributor to Towards Data Science on Medium and Cognitive World publications.
This article solely represents my views and in no way reflects those of DXJournal. Please feel free to contact me firstname.lastname@example.org
Growing world-class scaleup hubs through global lessons
Dean Hopkins, CEO at OneEleven, discusses how global scaleup hubs can learn from each other in order to build outstanding scaleups.
Any time a new global city or region emerges as a technology or innovation hub, the inevitable comparisons to Silicon Valley begin. New York as Silicon Alley, Israel as Silicon Wadi, and Toronto was recently dubbed Maple Valley to much scorn.
But it’s time for globally emergent innovation hubs to look beyond Silicon Valley as they work to build scaleup success, with each location learning from the specific lessons of one another to help all players in the community succeed.
Outside the original Valley, collaboration, diversity and connections into other ecosystems are major strategic advantages for any hub that wants to scale faster – more connections, more funding, more talent, more resources and more stories to share to teach others.
Just look at Stockholm: With a population of only one million, it has developed more Unicorns per capita than any other innovation ecosystem outside Silicon Valley. Among other things, connecting into other major hubs helped propel growth and seed opportunity.
With OneEleven now established in the UK, we’re applying lessons from two leading hubs — London and Toronto — to guide our strategy and propel our value. Both cities embody hard-earned scaleup lessons, like specialization, building ecosystem partnerships and leveraging the power of diverse leadership, that we believe are key to ecosystem and company success.
Focus on growing the greatest verticals
London has built an ecosystem around its strengths.
The city is by far the leading source of fintech innovation worldwide: it has the greatest concentration of fintechs and the largest workforce in fintech — it dwarfs everywhere else even New York. In the first quarter of 2017, London saw $421 million invested in its fintech industry pushing New York out of the top spot for fintech investment. The City of London has worked with a variety of institutions to rally behind this emphasis on fintech, bringing together government, educational institutions and various sources of funding to embrace the fintech ethos.
The lesson to be learned from London’s focus on fintech is that innovation hubs need to concentrate their efforts in certain sectors where they already stand out as a global leader.
In Toronto, we’re starting to see a lot going on in the deep AI tech space, through the Vector Institute and other organizations building on a research base of over 30 years by Dr. Geoffrey Hinton and his colleagues. Of course, there’s room for improvement. While research labs are popping up regularly, with big partners involved, Toronto and Canada are lagging when it comes to patents and application of AI tech. As we build up this sector of our innovation ecosystem, we have to develop a well-rounded AI industry that includes a robust IP regime to keep AI innovation in Canada.
Diversity in leadership
Both London and Toronto also boast the highest demographic diversity of global cities, and demonstrate how valuable entrepreneurial leadership from all over the world can be. Forty percent of London residents classifying themselves as other than white according to a 2011 census, and that diversity powers the tech and innovation ecosystem in the city. Recent research shows that immigrants and people from minority backgrounds in the UK are twice as likely to be early-stage entrepreneurs.
Toronto is similarly diverse in its population, and talent is one of the reasons the city is seeing global recognition as an innovation hub.
Canada’s fast-track visa program prioritizes highly skilled workers and entrepreneurs and was created as a talent magnet for Toronto especially – last year MaRS released survey results showing 45 percent of Toronto tech companies made international hires in 2017 alone, and 35 percent of respondents used the visas to hire.
Other scaleup hubs could build valuable leadership and collaboration from a similar approach to entrepreneurship: one which looks to bring in more diverse, global talent on the leadership side, as well as the wider talent side. Scaleup communities have to be competitive on the world stage by inspiring people from all over the world to come and build their businesses there, as a lack of immigration and global perspective can starve an ecosystem of oxygen.
Culture of collaboration
We’re very fortunate in Toronto to have a culture of collaboration that starts at the earliest stages of entrepreneurship, and continues throughout company growth. There’s a strong expectation that you will work together, and for that reason, forming a community in Toronto is almost a matter of course.
Hubs like MaRS, 111 and the DMZ, for example, have opened up prime real estate to provide space for young companies to grow and to foster their developing businesses. Canadians have proven they are wired differently and Toronto’s collaborative and inclusive culture is one of its strongest competitive advantages.
In London, there’s a hyper-competitive environment for businesses, and perhaps not as naturally collaborative of an environment. That might just be because the city has only just recently seen an effort made to boost that kind collaboration from organizations like the Scaleup Institute and Tech London Advocates.
But collaboration between government, academia and business is one of the things that makes London a world-class scaleup hub.
Collaboration between groups tends to be verticalized in the UK, with TheCityUK being a prime example; the industry-led body that represents UK-based financial and professional services companies showed that collaboration between financial institutions and fintech companies can speed up the process of creating innovative products and services. By looking at IP, regulatory compliance, data protection and privacy, TheCityUK provided seven possible models for collaboration between banks and fintech companies.
Big scaleup success stories can also influence the effort to increase collaboration in scaleup hubs — and London has some amazing stories to tell.
Renewable energy company Bulb grew from 85,000 customers to 870,000 in the space of 12 months, becoming one of the fastest-growing scaleups in the UK. The company’s founders Hayden Wood and Amit Gudka are immensely proud of their place in London’s ecosystem. This is how how big names in a scaleup hub can advocate for an entire community.
For our part at OneEleven, we’ll work hard to build up that kind of collaborative community and collective effort as we continue to expand into London’s innovation ecosystem. We want to ensure that the success of these companies continues past their early stage, into growth and on into the billion-dollar club. The middle chapter is currently not being written in London — despite early stage support for companies and big success stories — and that’s what 111 is here to address.
Global scale through collaboration
Innovation hubs around the world can also work together to take the friction out of companies expanding between markets. Furthermore, cooperating markets can increase their competitiveness by promoting an exchange of innovative business practices, and reap the economic benefits that scaleups can bring to innovation ecosystems.
London and Toronto are a good example of global collaboration, as they the two cities have begun to explore greater cooperation when it comes to facilitating expansion between hubs.
The Mayor of London’s promotional agency London & Partners has opened an office in Toronto to better encourage Canadian businesses seeking to expand to consider London for their next destination, and to support UK businesses seeking expansion into Canada’s market. Over the last decade, the organization says 44 London businesses have expanded into Toronto and 118 Canadian businesses have set up shop in London during that same period.
This is only the beginning when it comes to proper cooperation between these two cities: government, academia and innovation hubs should work together to encourage scaleups in their efforts to expand between international markets.
Greater than the global sum of our parts
At OneEleven, it seems to us that the unique evolution, and now collaboration, between the London and Toronto ecosystems signals the rise of a global network of innovation that is in its early stages. Such a global network, powered by the diversity of each market, promises to have a dramatic effect on the ability for scaling companies to access talent, customers, investors and partners much more easily. We are excited to be a part of the rise of this globally connected and collaborative ecosystem that builds on what was started in Silicon Valley, but brings innovation into the more global and highly connected digital present.
Robots aren’t taking our jobs — just yet
A robot may take your job one day, but so far there is little sign of this happening, according to analysis from the World Bank. While there are predictions about machines taking more jobs associated with humans, the pace is relatively slow.
The rise of automation has been reviewed by the World Bank chief economist, based on data collated from a number of industries. The news is mixed. Most advanced economies seen a decline in industrial jobs since the year 2000 and a rise of robots, in other parts of the world, notably East Asia, there has been a net gain of manufacturing jobs and little sign of robots replacing these types of roles.
Overall, estimations of the impact of automation have been less optimistic. For example, in 2017 Oxford University researchers Dr. Michael Osborne and Dr. Carl Frey interpreted data which suggested that over fifty percent of jobs in a developed economy are vulnerable in terms of humans being replaced by machines. Similarly, the World Economic Forum forecasts that machines and automated software will be handling fully half of all workplace tasks by 2025.
In contrast, some other predictions are overtly positive, such as a report from Siemens, that suggests the ‘fourth industrial revolution’ will add billions to economies and that, instead of fearing robots, the drive towards automation will actually generate more jobs.
In relation to the World Bank analysis, World Bank’s Chief Economist Pinelopi Koujianou Goldberg, interviewed by Bloomberg, states: “This fear that robots have eliminated jobs — this fear is not supported by the evidence so far.”
To support this she draws upon the analysis contained within the World Development Report 2019, subtitled “The Changing Nature of Work.” The report is considerably pro-technology, indicating: “Work is constantly reshaped by technological progress. Firms adopt new ways of production, markets expand, and societies evolve. Overall, technology brings opportunity, paving the way to create new jobs, increase productivity, and deliver effective public services.”
However, as Goldberg discusses in the World Bank report, the range of different work undertaken will alter, with employees far more likely to hold several different jobs over the course of their careers instead of holding down a position with the same employer for decades.
Proptech set to disrupt real estate in 2019
The real estate industry is not only the oldest but the biggest of our business entities, and today, technology is starting to disrupt it.
There’s a word for this kind of real estate technology. It’s called “proptech,” a technology developed specifically for the property market. Proptech brings together multiple facets of the industry — from planning and construction, to the sale of a property.
Proptech platforms allow realtors to remotely present on property development and sale information, but this is just one small part of what can be done with this technology. The platform also includes online services that transfer digitized documents to the cloud (which can then be digitally signed) and allow access to regulations pertaining to a particular property.
How proptech works
Devin Tu is the founder and CEO of MapYourProperty in Toronto, Canada. Tu’s company makes use of a digital tool that gives real estate developers a digital interface to access layers of important information about a property, including zoning bylaws and nearby proposals.
To show how the proptech app works, Tu described how it served one client. “We had a client looking at a site in North York that they thought was ideal. But then, they used our tool, which scanned 25 different regulations and checked developments in the area in real time,” said Tu. “It turns out they had missed a key floodplain regulation.”
Tu went on to say the client almost got stuck with a $10 million piece of property he would not have been able to develop. The area remains a parking lot today.
Regarding the developing trend of proptech, Tu notes that the recent growth of the property industry has come about because of necessity. There’s a shortage of land and competition is increasing, forcing realtors and clients to make quick decisions.
Property industry plays catch-up
Frank Magliocco, a partner at PwC Canada who specializes in the housing market, told Mortgage Broker News that the real estate industry has been historically slow to embrace new technology.
“I think what you’re going to see now is a fairly significant ramp up in embracing that technology once it becomes more mainstream,” said Magliocco. “It’ll be increasingly important to remain and be competitive in the marketplace. Once you see these technologies prove out, you’ll see more and more adoption.”
It looks like Canada is going to end up as one of the next major regions for property technology innovation. Besides MapYourProperty, several large Canadian organizations have made announcements of their move into the PropTech space, including Toronto-based Colliers International and Brookfield.
Transportation2 months ago
BMW pushes the limits of the IoT
Manufacturing2 months ago
Dow Chemical envisions the future of manufacturing
Leadership1 month ago
The great buy-in: How to learn to love AI at work
Events2 months ago
The mesh conference is back, new focus aimed at digital transformation
Leadership2 months ago
20/20 Armor brings Street Fighter dreams to life with innovative tech