Several recent articles have focused on a world that is changing faster than anything the world has ever experienced. From the socioeconomic front, to the geopolitical, to the technological, and more, the pace is accelerating. This Acceleration is not new, but it seems that it finally made the radar of organizational leaders. This phenomenon calls into question the traditional view of five-year plans. The world in five years likely looks quite different than our current world. This puts the ability to pivot and change at the heart of future organization success criteria. This new-found awareness highlights the need for flexibility, resilience, and adaptability, likely accelerating the path Towards Digital Transformation.
Future of business
What’s Next for Your Business? Ask A Futurist!
I will be participating in another radio show brought to you by Coffee Break with Game Changers. The show is hosted by Bonnie D. Graham tomorrow 7-12-16 at 10:00 am EST. You can listen live or at your convenience after the show.
The buzz: Need X-ray vision? Business and social cultures are changing faster and in more ways than we ever imagined! Take Brexit, where an economic, political and social ripple disrupted the world after a majority vote by UK citizens to leave the EU. Compounding this, new technology innovations – i.e., virtual reality systems, artificial intelligence, self-driving cars, the Internet of Things – are transforming every company, while new business models are transforming entire industries. How can you see “around corners” and be proactive? Ask a Futurist for the secrets behind their long-range lens. The experts speak. Frank Diana, TCS: “The future started yesterday and we’re already late” (John Legend). Gray Scott, Futurist: “It is better to err on the side of daring than the side of caution” (Alvin Toffler), Kai Goerlich, SAP: “The future belongs to those who see possibilities before they become obvious.” (Oscar Wilde) Join us for What’s Next for Your Business? Ask A Futurist!
No Ordinary Disruption
In my last future of business series post, I focused on a recent book titled No Ordinary disruption. That post explored the author’s belief that our intuitions must be reset. In that same book, the authors explore what they call “trend breaks”, or shifts away from the trends of the recent past. This post will look at these breaks and their impact on 21st century organizations – and it starts with value. In the rapidly growing world of ecosystems, the way value is created and captured is changing. But, more fundamentally, even our traditional views of value are being challenged. The authors use GDP as a way to underscore this point. They estimate that digital capital is now the source of roughly one-third of total global GDP growth, with value delivered via intangible assets like Google’s search algorithm or Amazon’s recommendation engine. Even our long standing view of capital itself is shifting, as human creative capital becomes a critical source of value.
Additionally, future value increasingly accrues to consumers. In a recent article titled Why Every Aspect of Your Business is about to Change, the author talks about the destruction of value for incumbents and the creation of value for consumers in the form of consumer surplus. They use a powerful example to make their point: Skype brought in $2 billion in 2013, but McKinsey calculates that at the same time, they transferred $37 billion away from telecom firms to consumers via free or low-cost calls. Even the innovative new company only gets a fraction of the value created (Skype: $2 Billion, Consumers $37 Billion). So back to value and GDP: consumer surplus is not accounted for in the way we measure GDP. This creates two challenges: First, do we need to change the way we measure value? Second, how do companies monetize the newly created consumer surplus?
So what does this mean for the future of business? Let’s start with something right from the aforementioned book: On the first day of classes at Ivy League colleges, it was common for the dean to warn students: “Look to the left, look to the right. One of you won’t be here next year.” That seems very appropriate when looking through the lens of company viability. This real phenomenon unfolds over the next decade, driven in part by several trend breaks as identified by the authors:
Will our fundamental beliefs be challenged in the coming decade? In a recent book titled No Ordinary Disruption, the authors talk about the need for an intuition reset, where everything we thought we knew about the world seems to be wrong. They see our world changing radically from the one in which those intuitions that drive our decision making were formed. Skeptics abound, but I for one see the writing on the wall. In the future-of-business series kick-off, I focused on Future Scenarios as a major force in altering the future of business. Let’s continue the series by focusing on other forces.
In the book referenced above, the authors compare the coming transformative period with the Industrial Revolution of the late 18th and early 19th centuries – where one new force changed everything. As I have tried to depict in my future scenario Visual, we are dealing with multiple forces or shifts that are converging. In their analysis, the authors conclude that our world is undergoing an even more dramatic transition due to this convergence. They focus on four forces (urbanization, technological change, aging, and connectivity) and deem that any of them would rank among the greatest changes the global economy has ever seen. Compared with the Industrial Revolution, they estimate that this change is happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact – digest that as you consider whether our fundamental beliefs will change in the coming decade. Here is a quote from the book: “Although we all know that these disruptions are happening, most of us fail to comprehend their full magnitude and the second and third-order effects that will result. Much as waves can amplify one another, these trends are gaining strength, magnitude, and influence as they interact with, coincide with, and feed upon one another. Together, these four fundamental disruptive trends are producing monumental change”
In my recent post on the Future Business Landscape, I shared predictions pulled together by SAP. The sources for this type of information are multiplying, which for me signals the start of a growing focus on the future of business. With this post, I am launching a series that delves into what that future might look like, starting in a logical place with future scenarios. This visual representing a series of paradigm shifts has anchored my thinking for some time, and sits at the heart of this future.
The Future Business Landscape
I expect the conversation regarding the Future of Business to intensify over the coming months. Evidence is mounting that business as usual is a thing of the past. In a recent post by SAP, they present ninety nine ways that digital will change business. As you look at the information presented, and see the number of shifts occurring at the same time, it’s hard to imagine a business landscape that weathers this storm unscathed. Here are examples of these shifts from the SAP post:
- At the current turnover rate, 75% of the companies in the S&P 500 in 2027, will be new (companies not currently in index today)
- By 2019, approximately one quarter of the entire U.S. workforce will be independent workers (self-employed, independent contractor, freelancer, temp contractor, etc.)
- By 2030, 10% of the largest companies in the U.S. will be virtual corporations (less than 10% of their workers will be in an office at any point in time)
- 50% of the U.S. Jobs lost in the 2008 recession were middle-skilled jobs, but only 2% of the jobs gained since then have been middle-skilled
- By 2025, there will be 10 global virtual currencies that will be considered mainstream. Their combined market value will exceed $5 Trillion, and Bitcoin will still be the largest.
- Private and commercial robot use will grow 2,000% from 2015 to 2030, creating a $190 billion market
- By 2030, 2 billion jobs will disappear – roughly 50% of all the jobs on the planet – as a result of technology advances
- 3D Printing usage will grow 2000% between 2015 and 2030
- Purpose-driven and value-oriented organizations outperform their competition 15 to 1
- By 2030, sensor use will grow 700,000%, solving nearly every human need such as cancer-killing chips
- By 2020, information will reinvent, digitize, or eliminate 80% of business processes and products
- Although 90% of companies view advanced and predictive analytics as important, less than 30% have currently deployed them, and only 30% have plans to do so
- There will be more words written on Twitter in the next two years than contained in all books ever printed
- By 2025, the total worth of IoT-enabled technology is expected to reach $6.2 trillion – most of that in healthcare (2.5 Trillion) and Manufacturing (2.3 Trillion)
- Within the next five years, more than 90% of all data from IoT will be hosted in the Cloud, reducing the complexity of supporting IoT “Data Blending
Just a small sample (more via the link above) supporting the notion that the future of business could look considerably different than its past. I’ll pursue the future business landscape in up-coming posts.
The Future of Business
This list of 99 Facts pulled together by SAP continues to build the case for inevitable change. The title of this SAP presentation is “The Future of Business”. Here are some of the key facts from various sources. There are embedded links in the content that take you to the source documents. Enjoy.