I recently heard a financial services executive on the radio talking about Bitcoin. When a listener asked him to explain what it was, he couldn’t. I’m constantly amazed by the number of leaders who aren’t across the detail of important innovations that are candidates to revolutionise their businesses in the near future.
There is no doubt that our economies are getting more complicated. One response across business has been the gradual disappearance of traditional conglomerates to be replaced by larger, more specialised, businesses that do a small number of things very well. Specialisation makes organisations more efficient but also increases the risk of disruption. If the thing a business does well, such as issue credit cards, sell books or make trains is challenged by a new technology then it can bring the whole enterprise down.
Good examples of changes that are coming with more that is unknown than known include cyber currencies, blockchain, quantum computing, artificial intelligence, smart cities, augmented reality and additive manufacturing.
These are some of the technologies that are likely to drive big decisions for leaders in the coming years. Ambit claims are being thrown around which may or may not be true. For example, some are saying that quantum computing is going to make conventional computing redundant, blockchain is as fundamental to the internet as the invention of the World Wide Web and artificial intelligence is bringing us closer to “the singularity” where computers outsmart humans.
If any of these claims, and many like them, are true then it is safe to say that many businesses that exist today will be extinct in a few short years. But for every claim there is a counter-position. Just as many experts argue that cyber currencies will soon fall under the supervision of existing regulators as predict a completely open financial system. Similarly, city planners disagree about whether smart transport will bring more people into central business districts or if more work will be distributed through neighbourhood clusters.
In each case, executives and boards cannot rely on others to be the experts. Those businesses that are on the winning side of history will have leaders who have taken the time to educate themselves on the most important innovations that are sitting in today’s laboratories. More than simply predicting the outcome of today’s research, these leaders can play a role in shaping the work of scientists and engineers putting their businesses in the box seat to tailor the future. When you think of organisations whose leaders fall into this category, Netflix, Amazon and Tesla immediately come to mind, but there is no reason to assume this management mindset should be limited to these cutting-edge video, retail or car companies!
Left on their own, research teams working on initiatives like quantum technologies, blockchain and the next generations of manufacturing technologies are often missing the opportunity to commercialise aspects of their solutions early. With the benefit of an understanding of the breadth of today’s challenges, sometimes incomplete research can deliver incredible advances.
For example, quantum computing is driving research that could yield interesting materials and sensors long before viable computing devices are even close to commercialisation. Medical, mining and energy businesses are among those that should be on the lookout for more immediate applications and perhaps partner on research efforts.
Similarly, augmented reality developers are looking for real-world applications. Retailers have the opportunity to apply massive amounts of valuable information visually if their leaders know what the technology can do. A clever department store might better challenge online competitors by making their physical store a giant website, providing all the product information that the store staff are going to find it hard to know.
Of course, it isn’t necessary for every leader to be capable of fundamental quantum computing research or able to engineer smart devices, but it is important they can delve into the details with experts and challenge them to explain their work in a digestible way. It is amazing how often an expert will overcomplicate something when talking to someone who doesn’t express a desire to understand the detail, but will find the simple explanation when confronted by a genuinely interested leader.
Such technical confidence has other benefits with executive teams realising that they can’t abdicate business and customer technology decision making in favour of specialist teams. With everything from finance to product systems directly affecting the capability of the overall business, there is no longer a place for leadership at a distance.
The result of such interactions can be amazing. Some large organisations are applying approaches to agile management based on experiences in their technology teams (see The agile working style started in tech but it could work for banks). Others are applying robotics and augmented reality in inconvenient or risky places where people otherwise had to go (for example, see Miniature robots speed power generator inspections).
It is no longer about the technology experts getting closer to the business, it is about everyone collaborating to find innovation in unexpected places and shaping the future!