Can You Create the Traditional Company of the Future?
Geoff Smith's Blog
Posted On February 13, 2019
Dynamic new companies are being created every day to take advantage of the world’s digital future, and to violently disrupt traditional companies, like the one I’m responsible for leading. And of course there are our friends the FANGs, etc., who merely want to take over the world.
The ‘legacy’ companies still have great strengths and wide market dominance, for now anyway. Almost every commercial enterprise we encounter during our day has existed for many years as a leader in an analog world, and they(we) are all determined to be successful for many years to come. So we know that we must transform ourselves. But what does that mean exactly?
Unfortunately, most of us still have to live in the very intense present. We still have conventional shareholders who would like a reasonable return right now. We are reliant on traditional clients who - in the EllisDon example - need their buildings completed yesterday, all of which requires a great deal of ‘analog’ expertise and focus from every employee. We don’t get a great deal of spare time.
Let me just add that most of the great companies I have experienced over the last few decades got that way because they pursued ideals as well as profits. They usually cared a great deal about their employees, and were usually trying to accomplish something meaningful that went beyond dollar signs and happy customers (though both are obviously key). The digital enterprises may chase similar values, but they are starting from a different place.
So: If it’s easy to say that every company must be a software company (it must), it’s also impossible to know how this will play out, and how long it will take. This blog is not about denying the future or delaying the inevitable, it’s about getting from here to there. But if a company has been founded upon great employees pursuing real meaning in their professional lives, then what do you do when the machines - AI, Machine Learning, etc. - threaten to displace most of those jobs? What do you do when the digital revolution wreaks havoc upon your industry structure, your company, and the individual careers inside it?
Of course it’s coming, let’s not be seduced by the intellectual opiates being peddled: that the other major industrial revolutions created more jobs than they eliminated (etc., etc.). This time is different, and all that sedative talk is likely wishful thinking. There’s a reason that progressive governments around the world are experimenting with Basic Guaranteed Income programs: They are terrified.
So how do you protect and transform these companies we’ve been working so hard to build, and prepare for an AI future that will digitize almost everything we work at now?
I’ll take all the help I can get, certainly, but here are some of the things going around my brain when I ponder this ‘company of the future’. Have at it, by the way, I would enjoy the conversation:
- I recently read that while the ‘knowledge’ professionals, such as lawyers and doctors, are greatly threatened by AI (since the machines will do better legal research and medical diagnosis, instantly), the ‘caring’ professions - such as nursing - will be around forever. Human support, empathy, care, security - expertly provided - will always be in demand. Be the company your clients turn to in times of need, not for knowledge (which will be the digitized commodity) but for the things beyond knowledge. The demand will be very high, and your objectively knowledgeable competitors will have no supply, because they have never thought that way, and can’t.
I recently read that one of Canada’s major banks, while embracing ‘Fintech’, is also focusing on rejuvenating its branch network. Which means to me that they realize that financial health care requires both doctors and nurses
- In the same vein, while the machines will be profoundly knowledgeable, they won’t - for a long time anyway - be conscious or thoughtful. They will be factually analytical, but not creative or original. They will be a deep repository for all the world’s conventional wisdom. There will always be grand opportunity for the courageous thinkers who spot holes not in the data but in the conventional thinking that created the data, and in the conventional mind of the analyst who wrote the core algorithm. They used to tell us to build ‘knowledge companies’. Now we’ll have to build ‘beyond knowledge’ companies. Courageously thoughtful companies (with courageously thoughtful algorithms).
- Surely it’s obvious to everyone that it is suicidal to give away your data - all your knowledge, experience and relationship expertise - to software companies in return for short term productivity improvements. So why do so many companies keep doing it? Why do whole industries and professions sign on for this, in return for short term efficiencies? Surely the insights to be gained from your data is the lifeboat to your company’s future.
- I get that machine learning will calculate the odds of every possible outcome, which is the essence of risk analysis. I also hope that my competitors (and the disrupters) will be coming to the same analysis-based conclusions based on the same historical data and therefore all thinking generally the same way. But if entrepreneurialism is just the combination of original thinking combined with a hunger for action, and if most people are not entrepreneurial (which they aren’t), and if the data is historical and doesn’t have an entrepreneurial foundation (some of it will, most of it won’t), and if the algorithm writer is data driven rather than entrepreneurially curious.... well, you get the drift. Machines don’t takes risks, people do, and most people don’t really. Purely data driven corporations will commoditize themselves and the entrepreneurs will win. Just like always. And the question will always be: How do you keep this entrepreneurial courage alive as your company grows and the years pass?
I’ve just reread this blog and now it seems fairly superficial. If Singularity is coming in our lifetime, these paragraphs are probably entirely irrelevant. I’m going to put it out there anyway. If I get one great idea back, it will have been very worthwhile (and we all need to be entrepreneurial).
Thanks very much for reading.