Disrupt … or Be Disrupted

“Established companies are being disrupted faster than ever before according to the Academy for Corporate Entrepreneurship. The academy also believes that 75% of the S&P 500 will be replaced by 2027.

That is a mind-blowing statistic.

Small businesses are not immune to this potential disruption either. When you consider that there are approximately 30 million small businesses in the US today and they employ almost half of the US workforce this warrants a further look.

What the heck is going on?

In case you hadn’t heard, we are entering a new era of technology innovation. Some claim we are at the precipice of another industrial revolution. History shows that this has happened only three times. The first industrial revolution (beginning ~1784) was typified by mechanical production, steam power, the railroads and telegraph. The second industrial revolution came in the next century (beginning ~1870) with electrical power, mass production, radio, tabulating systems and the advent of the assembly line. The third industrial revolution came in the next century (beginning ~1960) with automated production, programmable computers, electronics, video recorders and eventually the Internet.

At every industrial revolution

  • New industries were created and rapid growth ensued
  • Fortunes were made and fortunes were lost
  • New jobs were created and outmoded jobs eliminated

This fourth industrial revolution is being called the “Age of Intelligence”.  Data is exploding and flows from every device in unprecedented volumes, variety, and complexity. Traditional analytics and other decision support approaches are unable to fully exploit its value … driving a need for new innovation in many areas. New business models, a growing digital economy, aging workforce and global skills shortages are all driving this same need for smarter systems in all facets of life.

We have never seen so many disruptive technologies come along at the same time. It’s an overused cliché but this is a perfect storm of technology-based innovation. Artificial Intelligence (AI or Cognitive Computing) is leading the way. AI is a game changer. When combined with cloud, mobile, social, the Internet of things (sensors), nanotechnology, robotics, drones, 3D printing, new business models and more … it’s a lot to get your head around. It’s nearly impossible to fully understand the impact of this revolution right now … but’s let’s look at few areas …

If you’ve worked as a video rental clerk, travel agent, assembly-line worker, 411 operator, ticketing agent, stock-broker, department store or telephone book advertising salesperson you already know what I mean.

According to a recent McKinsey report … we can expect artificial intelligence technologies to play an increasingly great role in everyday life.  Their potential effect on the workplace has, unsurprisingly, become a major focus of research and public concern. The report also explores which job roles will or won’t be replaced by machines. It can be accessed here.

As for me … I believe the adoption of AI (and other disruptive technologies) will indeed impact our lives in a big way. It will take some time … and will create new roles/jobs and eliminate the need for others.

I am not old enough to remember when “Computer” was job title and not a machine. I do know that role consisted of people who manually computed and/or counted things and the primary tool was the slide rule. Before that, it was the abacus.

Today, those same people who became “Computers” in the 1950s and 60s are more likely to be Accountants, Financial Planners, Controllers even Programmers today … which by comparison are certainly higher value and higher paid roles.

The Information Age (or 3rd revolution) birthed an entire industry (Information Technology).  It impacted corporate structures/strategies/governance and brought us household names like Amazon, Apple, eBay, Facebook, Google, Microsoft, Oracle, Yahoo and too many small businesses to count. It seduced us into wondering what is REALLY possible. At present, Evans Data estimates there are 18.2 million software developers worldwide, a number that is due to rise to 26.4 million by 2019 (a 45% increase). On the whole, that’s a huge amount of positive change and human advancement.

There will always be doom and gloomers who worry that robots will take their jobs. Sure, some statistics show that a large percentage of all employment roles will be impacted by machines within the next two decades. This impact will be good for some and bad for others.

It seems to me that history will repeat itself, and the same outcomes will occur again, in both large and small businesses:

  • Some roles will be eliminated.
  • Some roles will evolve forward and upward.
  • Many new roles will be created.

My point is … now is the time to take action and get ahead of this. The McKinsey report does a good job of detailing the roles and workloads that are most likely to be impacted. I think the more important issue is what are you going to do to make sure your job or company is benefitting from this. You don’t want to be the person left wondering “what happened?”

IBM brought this into the mainstream when cognitive system Watson … beat the best human competitors at Jeopardy! in 2011. That was the starting gun … and the race is on.

My experience with AI/Cognitive Computing (so far) has taught me the following:

  • Information is exploding at such a rate that it is impossible to read, assimilate and apply except in small volumes. Technologies to assist us with decision-making are now mandatory.
  • There is so much new information being generated that it is also impossible for doctors, lawyers or any information based professional to keep up with their professional learning obligations. Do you want a Doctor who is up-to-date on the most recent medical information to treat you or one who hasn’t kept up on the medical literature?
  • Too much information is creating numerous bottlenecks to decision-making and process execution.  Many information based processes are actually getting slower. Resulting delays can cause more errors.
  • Any situation where a human has to read, research, explore, find and or learn new information (before making a decision) is ripe to benefit from artificial intelligence or other new decision support tools.
  • This is particularly the case when unstructured text or documents are involved. This form of data is typically “dark” and not easily locatable. It also takes longer to learn from text-based information.
  • There can often be so much information (hundreds of pages, many documents) that the required time to read and assimilate further bottlenecks decisions from being made … exacerbating the problem.
  • If video or audio  is involved, one can spend countless hours looking/listening for snippets of relevant content. The time invested to reward equation is so poor that most people just skip video/audio altogether when looking for information.
  • Net-net … any situation where human expertise/knowledge is being applied (regardless of information type) could probably benefit from a system that makes cognitive (AI) assistance available. These systems observe, reason, apply, recommend and learn from outcomes … eventually optimizing those same outcomes as guided by humans. They don’t get tired, go on vacation, have a bad day or introduce personal bias and emotion … typically things that subvert optimal decisions and outcomes.

The era of Cognitive Computing (or Artificial Intelligence if you prefer) is here NOW. Like disruptions of the past, there will be winners and losers. Robots and artificial intelligence based tools will certainly transform the nature of work.  I personally think for the better.

But what are you doing about it?

Heed this call to action – whether you are involved with a big business or a small business!

I will be delivering a keynote address and exploring this topic in much more detail at the upcoming Loudoun Small Business Conference on May 15, 2017. This event is the brainchild of the folks who run The George Mason Enterprise Center in Loudoun County, Virginia. Event details can be found here. If you are local, I hope to see you there.

As always, leave me your comments below and check out the following resources and organizations who will be at the event:

 

Capitalizing on Healthcare Disruption

One of the best books on business strategy is “The Art of War” by Sun Tzu even though it was written sometime around 512 BC … and is actually about military strategy. I have read it several times over the years and many of the lessons it contains apply directly to business today.

In thinking about the current healthcare transformation, I am reminded of my favorite quote from Tzu’s book:

“In the midst of chaos, there is also opportunity”

Healthcare organizations are dealing with a nearly impossible amount of change. Most of it is not optional and the amount of disruption is difficult to comprehend for outsiders. The future health (pardon the pun) of today’s healthcare businesses depend on the actions they take in the next few years. Some organizations will take steps to acquire or be acquired … some will implement other strategies to sustain themselves and grow … and some (unfortunately) will go out of business.

Standing still is not an option. Survival in the healthcare industry of tomorrow requires participants (payers and providers) to change their priorities, develop and implement new skills and leverage new technologies.

As the shift to value based business models becomes mainstream, successful organizations will have …

  • A priority and focus on their customer (patient) relationships
  • A clear and differentiating value proposition from their competitors
  • A technology enabled approach that monetizes and maximizes their value

Doing things the same old way won’t work in tomorrow’s healthcare value based economy. What are you going to do when you are not paid for volume any more?

In other industries, businesses have a core strategy and operating principles that drive their value … and are the basis for customer loyalty …

  • Lowest Cost – Walmart, McDonalds, Holiday Inn, Southwest Airlines, etc.
  • Most Innovative – Apple, Tesla, Under Armour, Amazon, etc.
  • Best Quality – Ritz Carlton, Mercedes Benz, Bose, Harley Davidson, etc.

What steps are you taking to quantify and monetize your value?

We are at a unique point in time. The amount of transformation combined with current technological change presents a once-in-a-lifetime set of circumstances.

Many organizations are simply dealing with their transformation requirements as they come up one by one … just checking the boxes. A smaller group is looking at transformation more opportunistically and not as set of items that must be “dealt” with.

If this wasn’t daunting enough, there are major technology shifts and breakthroughs happening simultaneously.

Major shifts include Cloud Computing, Internet of Things (IoT), Mobile (Smartphones), Big Data, Analytics and Population Health. These all represent new or improved ways of doing things.

Cognitive Computing is more fundamental. It is a new computing paradigm that is changing computing as we know it. Today, computers do what they have been programmed to do. The cognitive computing model is based on learning from outcomes. It does not depend on upfront programming.

I recently blogged about taking advantage of cognitive computing innovation in several recent posts:

Cognitive Computing: A Once in a Generation Race

Since standing still is not an option. What are you doing to create advantages?

Healthcare data will continue to explode … so why not harness it and use it for your business advantage?

Today

  • Data flows from every device – replacing guessing with precise data
  • 8000 research papers / new clinical trial information published every day1
  • 88% of healthcare data is unstructured (Dark Data) and of little use2
  • Key outcome data (social determinants, behavioral) often not available

By 2020 …

  • 7MB of new data will created every second, for every person on the planet2
  • Average person’s medical data – equivalent to 300 million books of information2
  • The total amount of stored medical data will double every 73 days2

Established companies are being disrupted faster than ever before. The average company lifespan on S&P 500 Index (top performer) has shrunk from over 60 years in 1961 to under 20 years in 2012.3

75% of current S&P 500 Index companies will be replaced by 2027.4

According to Accenture, 93% of executives believe their long-term success is dependent on their ability to innovate.

I blogged about the five areas of general business that Cognitive Computing will impact the most in Innovation in the Cognitive Era.

I also discussed some of detailed implications in a recent interview with Open Minds entitled The Future Of Care Coordination? It’s Elementary, Watson

We are at the beginning of a perfect storm of disruption that could catapult your organization forward if taken advantage of. Why not use Cognitive Computing to create, capture and monetize value as you transform? Sun Tzu certainly would.

I will be speaking about all of this as part of my keynote address at the upcoming Open Minds Technology and Informatics Institute in Washington DC on November 10-11th.  I hope to see you there.

As always, leave me your thoughts and ideas here.

 

Footnotes:

1 – CBS Sixty Minutes – October 2016

2 – IBM

3 – Innosight

4 – Academy for Corporate Entrepreneurship