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
Avoiding the falsification of medicines with blockchain
Counterfeit medicines are a problem around the world, with many producers of false medicines attempting to illegitimate drugs from pharmaceutical companies. Blockchain could be the answer to stem the tide and the U.S. FDA are interested.
Concerns with falsified medicines extend to where drugs which are targeted at those who are seriously ill. These types of medicines may be contaminated or they can contain the wrong ingredient or no active ingredient at all. Alternatively, the drugs may have the right active ingredient but at the wrong dose. In other words, such medicines may harm the patient or exert no beneficial effect at all.
The rise in counterfeit medicines is linked to a general increase in the number of people using the Internet to purchase commodities and this includes those using the Internet to self-diagnose and self-prescribe. This practice can lead to people purchasing ineffective medicines; medicines that normally require a prescription; or purchasing what they think are legitimate medicines but which are in fact fake.
For many years regulators, such as the U.S. Food and Drug Administration (FDA), Health Canada and the European Medicines Agency have taken measures to prevent counterfeit medicines from entering the drug supply chain. One such example of a practice designed to reduce counterfeiting is by implementing product serialization. Serialization requires a comprehensive system to track and trace the passage of prescription drugs through the entire supply chain.
An alternative could be based on blockchain. “Blocks” on the blockchain are made up of digital pieces of information, which store information about transactions, say the date, time, and transaction price. Blocks also store information about who is participating in transactions, and information that distinguishes the block from other blocks. The system is designed to provide transparency and security.
In theory, with a pharmaceutical blockchain it would be impossible to tamper with a medicine or to swap legitimate medicines with fake medicines. In addition, someone purchasing a medicine would be able to assess where the medicine came from (that is, did it come from a bona fide manufacturer?)
It is for this reason that the U.S. FDA is examining the potential for blockchain, as Engadget reports. The federal agency has begun a pilot program that enables the drug supply chain explore ways to track prescription medicine.
According to the FDA, blockchain will enable the “use of innovative and emerging approaches for enhanced tracing and verification of prescription drugs in the U.S. to ensure suspect and illegitimate products do not enter the supply chain.”
Pharmaceutical companies have until March 11, 2019 to apply. The pilot will not produce actionable results until 2023. In the meantime, more conventional methods for seeking to eliminate counterfeit medicines will have to suffice.
Big data analytics provides first world vegetation maps
Artificial intelligence and big data analytics have been applied to produce the first global map of the world’s regions where vegetation can and cannot be grown.
The Valencia University study assesses the global abundance of the phosphorus and nitrogen content in vegetation. Also assessed is the efficiency in water use. The scientists’ aim is to show where the best places are for agriculture and where environmental conditions are changing in response to climate change. The application of artificial intelligence and big data methodologies also enables an assessment to be made of our planet’s biodiversity.
Together with carbon, hydrogen, oxygen and sulfur, nitrogen and phosphorus are the principal chemical elements incorporated into living systems. They are strong signals of the suitability of different parts of the Earth for agriculture. Both nitrogen and phosphorus are needed by plants in large amounts (although excessive quantities can also cause environmental damage). In soil, nitrogen and phosphorus are typically found in the form of nitrates and phosphates.
The new global maps produced by the researchers gathered information from Google mass satellite observation data and then used a specially developed artificial intelligence program to assess the data and produce the color-coded maps. The satellites gathered temporal and spatial observations, and this produced a series of maps characterizing different biophysical parameters. To develop the maps required numerous observation-measurement pairings to be number crunched.
Speaking with Phys.org, lead researcher Álvaro Moreno explained why the maps were significant: “Until now, it was impossible to produce these maps because the required conditions weren’t available. We didn’t have powerful and accurate machine learning statistical tools, nor did we have access to great bodies of data or cloud computing.”
The new maps and the process behind them are published in the journal Remote Sensing, in a paper titled “Regional Crop Gross Primary Productivity and Yield Estimation Using Fused Landsat-MODIS Data” and an companion article in Remote Sensing of Environment titled “A methodology to derive global maps of leaf traits using remote sensing and climate data.”
The next steps are to use the technology to further assess the impact of climate change and to assess other important societal and ecological questions like the pressure on food production to meet population growth and the development of new technologies, like biofuel production.
Which innovations will shape Canadian industry in 2019?
Canada is in the midst of an economic shift. New and traditional industries are increasingly being driven by innovation and these advances in technology are shifting the economic landscape at an unprecedented pace.
This is the assessment by Borden Ladner Gervais, which is Canada’s largest law firm. The company has issued a new thought leadership report, titled “Top Innovative Industries Shaping the Canadian Economy”.
The report weighs in on the opportunities and risks Canada faces in order to maintain its status as an international leader in innovation across eight key industries: cybersecurity, the Internet of Things, smart cities, cryptocurrency and blockchain, autonomous vehicles, fintech, renewable energy and cannabis.
To find out more about the report and its implications for Canadian businesses, Digital Journal spoke with Andrew Harrison, a partner at BLG.
Digital Journal: Where does Canada stand as a global tech innovator?
Andrew Harrison: Canada has always been at the forefront of innovation. Products developed by Canadians or Canadian companies encompass a variety of industries and include medicinal insulin, the snowmobile, the telephone, the pager, BlackBerry Messaging, IMAX, the Canadarm and the goalie mask, to name a few. Canadians are also fast adopters of new technologies; email money transfer between individuals, which was inconceivable only a few years ago, has been used by 63 per cent of Canadians.
This is why Canada is recognized worldwide for its research and technological know-how, but we have to be mindful of the challenges in a global competitive market.
DJ: What potential does Canada have to grow faster? Is this sector specific?
Harrison: Canada is well positioned to succeed and take the lead in all innovative industries, but there are definitely sector-specific challenges that could limit this growth. For example, the lack of regulation as to whether cryptocurrencies are considered securities or not is creating uncertainty, which may restrain investment in this sector.
DJ: What are the risks that could hamper innovation and development?
Harrison: For any new product, financing is always an issue; with innovation, money becomes an even more crucial element. Companies must have access to capital – including from individual and institutional investors – if they want to bring their innovative product/process to life. Evolving politics and policies can also have a significant impact.
DJ: What framework will Canada need in the future to secure its innovation potential?
Harrison: The key element is finding a proper balance between regulating the issues that might be created by the innovation itself or its use and providing a space where innovations can thrive without too many restrictions.
DJ: What does the Canadian government need to do?
Harrison: In many cases, laws and regulations were enacted long before we saw these innovative technologies and products brought to life, so they need to be updated. In certain sectors, such as cryptocurrencies and autonomous vehicles, the Canadian government has yet to provide a framework that would define the playing rules for all participants.
The government will also need to take a look at its current regulations on privacy: the coming into force in May 2018 of the European General Data Protection Regulation (“GDPR”) and recent high-profile data breaches have created the need for stronger privacy guidelines. Failure to do so could prevent Canadian businesses from accessing the European market.
DJ: What can academia contribute?
Harrison: Universities play a big role in fostering innovation – they could be the home of research and innovation and incubators of ventures, entrepreneurs, and tech talent. Universities can partner with industry players and have their researchers work closely to solve key industry issues. This is already happening in Canada. The Smith School of Business and Scotiabank, for instance, have partnered to set up the Scotiabank Centre of Customer Analytics at Smith School of Business to bring together professors, graduate students and analytics practitioners to collaborate on applied research projects in customer analytics. The academia plays a big role in creating an innovation ecosystem.
DJ: What is Canada’s most pressing technological need?
Harrison: There is still much work to be done to connect with Canada’s rural and remote communities. In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that broadband Internet amounted to an essential service and adopted minimal performance standards across Canada: 50 megabit per second download and 10 megabit per second upload. However, the evidence presented to the Committee by a variety of stakeholders shows that the digital divide remains prominent in Canada – it is estimated that it will take roughly 10 to 15 years for the remaining 18% of Canadians to reach those minimums. Canada needs to develop a comprehensive rural broadband strategy in partnership with key stakeholders and make funding more accessible for small providers.
DJ: What type of investment is needed with skills and training?
Harrison: Canada has a serious shortage of tech talent, which makes it imperative for both the government, the education, and the business sector to invest in raising and fostering STEM talents. To help businesses attract the talent they require, the federal government is offering hiring grants and wage subsidies to offset payroll costs for recent post-secondary STEM students and graduates.
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