Asia-Pacific Leaders Must Prepare for the Future Shock

Although the digital revolution has been around for over 70 years, in very real terms it’s only just getting going now. Artificial intelligence, automation, algorithms, and big data are subtly altering every facet of our commercial and personal lives. However, there is a dark side to this revolutionary digital shift: a widening gap in ideology between traditional business leaders and the future workforce.

Leaders’ Fear of the Erosion of ‘Work’ Meaning

Automation is an all-pervading phenomenon that is reshaping the face of every industry and raising perhaps uncomfortable questions about the work done by people and the future relationship between man and machine. Business leaders have a bleaker and more dystopian outlook on the impact of the new technology than any other group. There is a growing fear that automation will negatively affect their work, cut them off from human contact, and erode their individuality. In fact, only 35% of recently surveyed Asia-Pacific executives believe that they will be making a more meaningful contribution to their work by 2020, compared with a global average of 75%. When it comes to the positive impact of digital technologies on their job commitment and engagement, and opportunities for advancement, their confidence is at rock bottom. They glumly feel that intra-colleague empathy and support will fade away and individuals will become more and more isolated.

According to this dismal prediction, people will have less motivation to study, go to school, and pursue a career; their range of emotions will be impaired and they will shun collaboration. Although this attitude is depressing, it does raise some key questions: Where will the age of accelerated automation lead us? How will humanity’s role be defined in the future?

The Stars of Tomorrow are Embracing the Digital Boom

The stark reality is that the attitudes of the new wave of MBA students are worlds away from those of the executives. They are excited about digital mediums being a constructive adjunct to their work, bringing colleagues closer together, and boosting enthusiasm for the work by 2020. In fact, MBAs in Asia-Pacific are twice as sure (70%) that digital will help them to more productively collaborate with others. In short, they see digital as the engine that will drive the future of our society, jobs, and work.

Isolation is not an issue for them; they know they can’t win the digital game alone as digital is inherently collaborative and is all about creating a level playing field through the democratization of information. The ability to nurture a cooperative approach is a work skill that will shortly be in great demand, and today’s leaders must be ready to change the way they approach it.

One area where current executives and the workforce of tomorrow do seem to agree is work satisfaction. While both sides feel that this aspect will be improved by 2020, they think about it in very different ways, hinting at a workforce/employer disconnect in the future. For today’s leaders, work satisfaction is all about business growth, while future workers are reliant on the expansion of the digital domain.

Shun the Company of the Past

Present business leaders are missing a vital point in their thinking on digital — they must realize that it has as much to do with boosting the role of humans as it does with redefining the face of a company. A lot of these leaders will be mulling over two salient questions come 2020: 1.) Did they foresee the imminent change in workforce expectations and attitudes? 2.) What did they do to transform their workplace in preparation? A generation from now, we will look back and see how organizations transformed themselves, their people, and all of our lives. Currently, many bosses are convinced they can achieve collaboration in the new era by simply installing collaborative software, which is way off the mark. Collaboration is not about platforms or technology; it is about engaging people to join you in a mutual journey that can transform a business from the bottom up and break down internal silos.

To succeed in today’s world, companies need to have a tribe that is fearlessly devoted to the company’s digital mission. Companies that are genuine in their person-centric approach, putting customers and employees first, are not just surviving; they are thriving. Such a model entails a massive overhaul of the prevailing management culture, which remains hierarchical and authoritarian in many Asia-Pacific firms. When transforming a company, one must be ready to make sweeping changes to the organizational structure. Business leaders should emphasize empathy and humanity to relate to their would-be successors who embrace such a philosophy.


The Two, Diverging, Tribes of IT

According to Forrester Research, the global technology industry is worth just shy of $3 trillion. Some estimates suggest that 20% of the global workforce is involved in the development and manufacturing of high technology. Since Alan Turing set up shop in Hut 8 at Bletchley Park and Bill Hewlett and Dave Packard kicked the widow of Palo Alto’s first mayor out of her apartment and starting using her garage as a laboratory, the business of technology has grown at a pace and in ways which would have been hard to imagine in the dark days of the early 1940’s.

Now though, as we accelerate into the fourth industrial revolution, with technology central to almost every aspect of business, society, and life itself, the technology industry is at a crossroads. Two very different types of IT industry are emerging, which bear increasingly little relationship to one another. A great divergence is gathering momentum which will see the IT “tribe” (the lovely phrase tech impresario Thornton May uses to describe, and flatter, his techie friends) break into two different tribes. In the next few years the two tribes will go in very different directions – and have very different fates - as software eats the world.

The first tribe – the “Originals” – are those that tend the servers, the databases, the compiler code, the Ethernet cables, that make the techno-centric world tick. They are the proverbial nerds, the geeks, the math savants, that loom large in the public imagination whenever the phrase “IT” comes up. Think the “PC guy” in the Apple adverts, think Steve Wozniak, think Bill Gates.

The second (new) tribe – the “Digitalls” – are those that write dating apps, music distribution platforms, accommodation websites, augmented reality filters, e-games, and machine learning algorithms. They are the new masters of the universe, dating the girls that used to date movie stars and rock ‘n’ rollers. Think Daniel Ek, think Brian Chesky, think Evan Spiegel.

The Originals are sinking into the fabric of infrastructure that surrounds us and are becoming part of the utility industry. The Digitalls are moving closer and closer to the head of the table and increasingly shaping the zeitgeist and culture we live in. In the process they are becoming part of the fashion industry.

Quite a difference, non?

There’s been lots of talk in recent years about “bi-modal” IT and aligning “old” and “new” IT. I wonder whether the reason doing this has been so hard (the horror stories out there, with a simple Google search, are legion) is that it’s increasingly impossible.

Originals and Digitalls just don’t mix.

Think about it – would you take the “PC guy” to the Vanity Fair New Establishment ball? Would Mr. Spiegel take Miranda Kerr to Oracle OpenWorld? Would Stephen Colbert have nerds – even of the suited variety – on his show(s), as he has with Biz Stone and Tim Cook and many others? Would the readers of Computerworld thrill to read an in-depth interview with Kim Kardashian about her mega-hit fashion website/app? (Well, actually, thinking about it, they probably would).

In 2004, Nicholas Carr, the former editor of the Harvard Business Review, threw shade at the IT industry with his book, Does IT Matter? His conclusion - that it didn’t and that IT was becoming a commodity, incapable of generating competitive advantage – was unsurprisingly unpopular with techie folks and found little traction with industry event paymasters (turkeys not being particularly keen on Thanksgiving). His argument, which built on thoughts germinating in the nascent Cloud Computing community, went underground following the initial sturm und drang, but continued to reside in the Jungian collective unconscious of proud pocket protector types everywhere.

Carr was onto something, but missed the real story.

The real story was/is that some IT matters a little. And some IT matters a lot. An awful lot. More than ever.

PG&E matters a little – a $31bn market cap on c. $20bn annual revenues. Facebook matters a lot – a $384bn market cap on c. $32bn annual revenues.

If as a stock picker you’d followed Carr’s advice in 2005 and got out of IT – generic IT – altogether, you would have missed Facebook, Twitter, Uber, AirBnB, Spotify, YouTube, Netflix, Twitter, and Snap (to name a few). That would have been quite a miss. Almost as bad as this ... https://www.youtube.com/watch?v=eer30sfqgkk

The Original IT industry provides something we take for granted now, like we take PG&E’s electricity for granted. The only time we pay it any attention is when it isn’t there. Then we grumble, but not that much, because we know it will soon be there again.

This is the paradox of success – the better you get the more invisible you become. And the more anemic your P/E ratio becomes.

The Original IT industry – the Originals – is/are still important; of course they matter. The world wouldn’t function without them. But it is a quasi-utility. Nothing more, nothing less.

There is nothing utilitarian about the Digitalls. There is nothing less about them and the new industry they are building. It is all about more.

The Digitall industry – the Digitalls – is where the action is. 30 years ago the 4.0’s flocked to management consulting; 20 years ago to banking; 10 years ago to private equity. Now, they’re all on the 101 or in zip codes 02138 through 02238. To paraphrase Willie Sutton, they’re writing code because that’s where the money is.

And nobody is taking the Digitalls for granted at all. The Digitalls are building the future; of work, of business, of growth, of society, of being a human being. The Digitalls are doing stuff that has never been more important; you know the riff – IT used to support the business ... now, IT is the business. The Digitall tribe is taking over everywhere and everything ...

The Originals find this all somewhat confusing. And are a tad conflicted. On the one hand they’re glad that geek is suddenly chic. But on the other, they’re disappointed that the Cobol seeds they planted turned into Twitter and Angry Birds and sexting apps. They’re glad to have lent their shoulders to giants, but they would have preferred to have been invited for a ride along on the G650ER.

The Digitalls, conversely, struggle to remember to say please and thank you to those who cut the path on the way to Eldorado. “Grace Hopper? Yeah, I liked her first couple of records”. “The Traitorous Eight? I love that movie!!!”

The Digitalls take Original IT – and the Originals – for granted. To them, Originals are hardly in tech at all. As Alan Kay put it, “technology is anything that wasn’t around when you were born”.

“Throw up another Amazon M3”. “I need another Apache Spark ... by 11am”. “Run the shopping cart algorithm through the Google Cloud Prediction API”. “Done!”

The tech is easy to Digitalls. What’s hard is getting traction. How do you get traction? You generate heat, buzz, make it lit, make it dope, get LBs and FBs. How do you do that? Well, now you’re talking marketing, and if you’re talking marketing in 2017, you’re talking fashion rules.

Every consumer good or service now has the characteristics of the fashion industry and the Digitall industry is no exception – seasons (the iPhone 8 following close on the heels of the iPhone 7), haute couture (a Vertu phone), diffusion lines (Chromebooks), runways (SxSW, Davos), celebrity fans (will.i.am, Ashton Kutcher) and of course mega ad budgets (three of the top 10 ten TV ad buyers are Digitall companies). Every good or service trying to find an audience is subject to the tides and eddies of the fickle public; a public amused to death by celebrity and (un)reality, and bored to tears by 157 channels with nothing on. Every good or service is launched into a sea of indifference with a cargo of hopes and dreams and a ballast of mortgage payments and VC funding.

Getting to terra pecunia requires marketing – big marketing – and big marketing without an understanding of wants and needs and whims and fancies and net promoter scores and active listening and blogger endorsements and product placement (etc., etc.) is hardly marketing at all. In other words ... fashion rules.

The Digitall industry – and Digitall people – live and die by fashion rules. Twitter is so last year. The cool kids have deserted Facebook. Vine is over. Instagram’s copying Snap. Slice is dope. Flight Club is lit. Digitall companies are all part of the Industrial-Entertainment-Fashion-Complex.

Twenty two years ago, Microsoft hired the Rolling Stones to help launch Windows 95. Mick Jagger was 51 at the time.

Tech’s come a long way.

So, back to the tribes. Can they mix? Can they co-exist? Can Originals become Digitalls? Will Digitalls become Originals overtime?

Sort of. In uneasy alliance. Some of them – the “perennials”. Over their dead bodies.

Of course the two tribes will continue to trade, and inter-mingle (and occasionally inter-marry). The Digitalls need the Originals, in the same way we need PG&E. The Originals can still call some shots and still have some skin in the Digitall game. As the great digital build out (making everything smart) gathers momentum, the tribes will be forced to cooperate; somewhere deep beneath a swipe right or a sighting of Bulbasuar is an Informix Warehouse Accelerator.

But the tribes are going their own way. Many of the Originals are looking to de-mount and hang up their arrows. Some still have many miles to ride but know that getting new blood into the tribe is harder and harder each year. All of them are aware that the tribe is not as strong as it used to be. Few of them can squeeze into skinny jeans and rock civil war era beards. Sure, they can still on occasion innovate and iterate and make the mousetrap a little better (though don’t forget that the last “big” enterprise app category to emerge (CRM) is now over 20 years old). But not that many people seem to care ...

The Digitalls, that give it a second thought, are conscious of their inheritance, but are more focused on the battles (fought on fashion rules) ahead. They’re pivoting and failing fast and doing the third launch https://twitter.com/bchesky/status/312438036929576962?lang=en in-between hob-knobbing at the Hirst http://www.vanityfair.com/culture/2016/10/hirst-bar and prepping their bunker in New Zealand https://www.theguardian.com/technology/2017/jan/29/silicon-valley-new-zealand-apocalypse-escape. They’re using tech, but are not of it. They’re trying to change the world.

The IT tribe of the first few generations grew from a small bunch of genii, scattered across the US and Europe. None of them could have conceived of what they would give birth to. The next evolutionary step will see the new tribe carry the DNA forward and build it into worlds that are still (to some) science fiction.

The Originals will be with us until all the world’s infrastructural workloads are automated away. Want to guess when that will be?

The Digitalls will be with us forever.

Or until they go out of fashion.

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The Great Health and Wellness Mash Up

The technology that powered the industrial revolution created towns like Manchester, Newcastle and Liverpool; the mass production of cars created a culture of commuters, dormer towns and pampas grass. Radio created a culture of listeners and spawned jazz, “Listen with Mother” (and the dreaded “fireside chat” now found at most conferences). Cinema created Hollywood, MTV, always-on news, and reality TV shows. The shift of technology—data, algorithms, robots, platforms—is creating a corporate culture that’s changing so fast that I’m afraid to offer examples because they could be outdated by the time you read this post! Seriously though, where I predict we’ll see a huge cultural change is how we think about health and wellness. The reason is different players beyond the big pharma suspects are challenging how and where we “do health”.

My last post—Digital Primes an Era of Collaboration and Innovation in Big Pharma—explained how value in life sciences was shifting rapidly into a world of data and algorithms. Massive amounts of value are now at stake from the bits and bytes unleashed from an ever growing list of sources that surround us—think of the Fitbit worn on your wrist, measuring every single step you’ve taken today (what? Only 6000 steps? C’mon, get moving!) Or the mindfulness app that tells you how to be calm and will soon tell you when you really MUST sit back and relax. The emerging intersection between health and wellness is becoming red-hot for innovation and opportunity. So much so that if you were going to dropout from your collage course and have a yen for making lots of money, you’re more likely to want to build or join a bio-tech start-up (don’t ask me, ask Bill Gates because he signposts bio-tech in his new guise as career advisor). This focus on wellness and its twin biotech, is going to be huge because of our aging populations and the growing prevalence of chronic diseases.

What’s fascinating is how different industry sectors are starting to melt and reform in startlingly creative ways in life sciences; new opportunities and niches are proliferating at speed, set around core mastery with data. Check out how the rag trade is starting to innovate with smart clothing and eyeing up the tantalizingly rich streams of data they’re beginning to trace through the products and experiences sold to their customers. Case in point: Kevin Plank, CEO of sportswear supremo Under Armour recently sketched out a connected wellness vision where owners of Under Armour kit (naturally) could predict when they were getting sick, so they could load up on the right medicine and beat it before it stopped them doing what they wanted to do—in his words “Can you believe we used to walk around not knowing when we'd get sick? Crazy!" Now there are healthcare information companies beginning to grow out across the rag-trade and beyond. Nike and Adidas increasingly know more about our health, social and exercise habits more than our own doctors do. And they’re capturing all this instrumentation outside regulation (for now) because until a few years ago they were just seen as manufacturers of trainers rather than instrumenting our life-style habits and in the business of health.

However, the radical new opportunities in health and wellness go way beyond predicting when we’re going to get sick or telling us how much exercise we should be doing. Using technology to radically improve efficiencies in how to deliver health and medicine outcomes is the name of the game. I’m not thinking about the (no-brainer) action of putting GPS tags on scanners or dialysis machines in hospitals and improving their usability—I’m thinking about the terrible rate of misdiagnosis that causes heartache and pain, and costs a small fortune to put right. According to reports, the UK’s National Health Service paid out £194million in compensation to over 1300 patients last year-- about one in ten payouts went to patients whose cancer had been missed or misdiagnosed. While, in the US, there are apparently close to 12 million misdiagnoses a year which equates to 300,000 patient deaths a year (that’s a scary 1000 deaths a day...). Yet, this horrible situation is something that new technology techniques can help sort out. Check out GliaLab as a signpost to where new technologies and ways of working are taking us—its mission is to bring together the next generation of medical talent (currently starved of funding) and augment its output with machine learning and big data to improve patient outcomes. GliaLab aims to create a faster and more accurate method of diagnosing cancerous tumors by using imaging tools, pattern recognition software and computational learning algorithms to offer smarter cancer diagnoses which saves time, money and heartache. The life-sciences sector is primed for incredible opportunities from these new technologies and new ways of working and new cross-industry relationships. Please read our Work Ahead and follow the prescription for how the digital economy will harness and reshape and industry that’s key for all of us.

PS. Health and wellness is certainly an emotive area. In the great big “Brexit” debate, healthcare funding was used duplicitously (and I’m being kind) and the mantra went something like this: “Leave the EU and spend the £350M we save every year on the NHS!” The NHS is struggling but technology can help it. Europe’s 20th century welfare model is breaking down in the teeth of demographic pressures and technology advances in care. It’s no surprise to see a massive upswing in new innovative ways of instrumenting health and preventing sickness and disease in the first place. The focus on wellness could radically change the economics of public healthcare as well as our outcomes for health.