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AI and the next frontiers of business

14 November 2018

5 minute read

AI and the next frontiers of business

Our current challenge is to give ourselves permission to wake up to how fast the world is changing. Two planets are colliding – the physical world, where business such as airlines and hotels use technology to do what they do, and the digital world, which doesn’t see passengers or guests, only data.


Tech businesses understand that with the right data, you can win in any industry – a mindset that has sent the market capitalisation of the “Big Five” (Amazon, Apple, Google, Facebook and Microsoft) soaring to make them the most valuable companies on the planet. Apple and Amazon are both worth over a trillion dollars each – more than Boeing, Bank of America, Walt Disney, 21st Century Fox, eBay, Ford, Hilton and VW plus a bunch of other household names all put together, thanks to their ability to permeate our personal and professional lives.

Amazon took 25 years to reach that trillion dollar valuation but is expected to make its second trillion within the next three to five years because of the multiple ways it is extending its reach into our lives and businesses with technologies such as artificial intelligence (AI). And Google, the world’s number one search engine, also happens to have the best-selling mobile operating system, and a company that hopes to extend life expectancy by 50-100 years. So how can we learn to think and behave digitally with AI at the core of innovation?

Future-proof organisations work on three horizons in parallel

Organisations that are the most successful in preparing for the future tend to think in terms of three horizons:

0-12 months: focus on operational excellence

These organisations are clear on the “vital few” priorities for the next twelve months to move their business forward, and seek to create closer alignment with key stakeholders by developing the deepest possible understanding of their customers and employees, and how they see the future.

1-3 years: focus on digital capability

Within this window, leading organisations explore where innovation and growth will come from, and how they can apply intelligent digital technology to change the way they do business. They scan the external environment to identify what might help or hinder their strategies and identify options they’d not previously considered.

4-10 years: focus on business model innovation

While they can’t fully anticipate the future, these organisations know they can plan for it. They explore developments – particularly in science and technology – that could influence the longer-term future, and create scenarios of different ways these forces of change could combine to shape the future of their industry and markets. The resulting insights help them identify what they need to do in the medium term to ensure they are forward-thinking, innovative, and flexible enough to respond whichever scenario plays out.

A powerful by-product of such an exercise, is that when businesses start to look four to ten years out, they often come up with bold new ideas about doing things in a radically different way, only to discover that some of those concepts can be put into action today.

Digital literacy is a ticket to the game

Worldwide, around $800 billion is wasted annually on IT projects that fail, and at least half of that waste is due to poor digital literacy at three levels. Firstly, there are the people at the top of organisations who don’t understand the technology they’re buying, what it’s capable of, or how others are already using it, and thus miss out on opportunities for innovation. Next are the managers and staff within organisations who don’t understand how the tech works and try to carry on doing things the way they’ve always been done. Finally, we have the tech developers who aren’t up to speed with the latest tools and aren’t able to deliver effectively on what the business wants.
 
We’re already seeing the advent of decentralised, fully autonomous businesses run entirely on AI and Blockchain, with no human workforce. The bottom line is that if we don’t understand digital, we become servants to the machine. We need to make the machine work for us.

Four breeds of innovator are emerging

With the rise of digital technologies, we are seeing four breeds of innovator emerge. The first are the Aliens – an elite minority that is fluent in the languages of technology that the rest of us don’t understand, like Blockchain. Our world will soon be entirely run by things most of us can’t fathom, so we have a responsibility to learn enough about it to increase our own comfort and become a trusted voice for our colleagues, customers and families.

The second category, Magicians, uses technology to enhance our lives in delightful ways. Take the DoNotPay app – the world’s first robot lawyer – masterminded by a teenage tech whizz who developed a bot to identify legal loopholes and challenge unfairly issued parking tickets (initially his own). The app is free, and users have successfully contested £3.8 million worth of parking tickets through 175,000 challenges. DoNotPay has now expanded from a single bot into a website platform to address other areas of law, plus a travel bot to negotiate cheaper rates and fares, or re-book reservations for customers if prices drop after they’ve paid. 

Another example of practical magic is the new generation of business lifting inspiration from dating apps such as Tinder and Bumble, realising that people are making potential life choices in a fraction of a second. The concept has already been applied to wake up the financial services industry with on-demand insurance for rarely-used, big ticket items. Swipe right to start cover when you need it, swipe left to stop cover once your valuables are once more securely locked away.

Thirdly, we have the Barbarians – the likes of Uber and Airbnb who have to disrupt fundamental models and regulations in the industries in which they operate in order to make room for themselves.  

And lastly there are the So What’s – those businesses that throw time, effort and money at technology initiatives to drive innovation that makes little or no impact whatsoever on their customers. You cannot afford to dwell in this category if you want to change the world.

How do we stay human in the face of AI?

As we embark on the fourth industrial revolution characterised by smart machines, there are currently three core types of applications emerging for AI. The first is where AI augments people-power by performing routine, rules-based processes, while humans continue to handle exceptions or make discretionary judgements. In the second use case, AI replaces humans, by building up a body of information about the specific domain in which they’re applied, distilled from the knowledge and experience of the humans at the top of their game. And the last is where AI scales expertise beyond human capability due to the sheer volume of information that can be assimilated to make a decision, such as in the field of disease identification and diagnosis.

So, amid all of this tumultuous change, how do we, as humans, maintain our humanity? Firstly, as technology will eliminate jobs and perhaps entire employment sectors from the economy, we as citizens need to challenge our political leaders to ensure our education and welfare systems are fit for purpose. We need to develop extraordinary leadership in both politics and business to navigate us through an increasingly uncertain world. As companies amass growing volumes of data, there are ethical issues to be addressed if we are to avoid Orwellian levels of surveillance and a consumer backlash at the invasion of personal privacy.

We need to admit that many businesses have a toxic culture caused by the pressure of work, resulting in an epidemic of stress-related illness. This demands a redesign of organisations to avoid treating people like machines, as well as putting a stop to pointless processes and report-writing, and instead investing that time into training, solving new problems, and finding new opportunities.

We must exercise our critical faculties and acknowledge that technology doesn’t have all the answers. What value from the ‘past’ do we want to retain, such as human relationships and personal interactions? How do we organise people and time across functions and organisations to focus on those three planning horizons that are so critical to businesses’ sustained success?

A further consideration is how to manage a business in which AI is working 24/7 and learning faster than humans, irrevocably altering the distribution of knowledge. What new skillsets will be required to navigate the new world? Leaders must start thinking about how to reassign people whose jobs are eliminated through automation and where those new roles will come from. With new monetisation strategies emerging, and new sectors being created by exponential technologies, how can business models be developed to win customers in different sectors?

Managers should encourage their team members to engage in regular, open dialogue about what they’re seeing and learning across the technology landscape. Leaders can also help themselves by picking two or three hot-button issues to solve, and engaging regularly with an accountable partner from another, unrelated company to compare notes about what works and what doesn’t.
 
Rohit Talwar is a global futurist, author, strategic advisor to global corporations and governments, and the CEO of Fast Future. Rohit was keynote speaker at Basware Connect London in October 2018.