The data revolution

ART FROM CLIMATE CHANGE DATA -  WWW.JILLPELTO.COM

ART FROM CLIMATE CHANGE DATA - WWW.JILLPELTO.COM

2018 is the year when companies started to take data seriously. Historically, it’s been consumers who have created the bulk of the world’s data, but that’s changing fast, and by 2025 it’s predicted that enterprises will become the world’s biggest data creators. From fitness-trackers to connected fridges, from purchasing habits to travel plans - big data is here to stay, and it’s helping companies to transform their businesses. But why is this data revolution happening now, what does it have to do with Artificial Intelligence, and how can your business take advantage of it?

If you’ve followed any news about AlphaGo, self-driving cars, chatbots, or voice assistants then you’re probably aware of the recent renaissance in the field of Artificial Intelligence. So what has changed to cause this recent growth spurt?

Increased processing power

In 1975 Gordon Moore, the co-founder of Intel, predicted that the number of transistors in integrated circuits would double every second year. That sounds like a boring fact, but it’s exactly this doubling that has given us the exponential growth in processing power that has led us from room-sized computers to smartphones in our pockets. And from a business perspective this has given us doubled calculation power to half the cost, every second year.

Increased sophistication of AI techniques

Alan Turing imagined the possibility of thinking machines as early as the 1940s. In the 1950s, the first AI programming languages were invented. However, it’s only in the past two decades that the field has started to make significant progress. Recent advances in machine learning techniques, especially with “deep learning”, have enabled new AI applications such as facial, gesture, and voice recognition, video analytics, natural language processing, as well as automated driving.

Increased volumes of data

90% of all the data ever created, has been created during the past two years. Read that sentence again, and take a second to try and imagine its implications. It’s not just the volume of data that’s been accelerating, but also the variety. This new treasure trove of data is giving companies new sources for insights, and even allowing for completely data-driven companies to emerge.

The key point to notice is the connection between these three factors: more data requires more processing power, which allows for more sophisticated algorithms, which need to be fed with more data. This creates a self-perpetuating feedback loop, with no current end in sight.

So what does more data and increasingly sophisticated Artificial Intelligence mean for businesses and society?
Let’s examine that question through three potential paradigm shifts:

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Job automation

It’s been predicted that fashion models and influencers will be some of the first professions to be replaced by AI. Take a look at @lilmiquela, a completely virtual 'influencer' with 1.5 million Instagram followers. Of course, job automation will have a much wider impact than just the fashion industry. Over time, more roles in more industries will become automated, and the type of work humans will be doing will start to shift. This change doesn’t have to be all “doom and gloom” though, as it has been predicted that 65% of the jobs that will exist in 2030 haven’t even been invented yet!

Bot-to-bot transactions

If you work with insurance, banking, or energy services then you need to prepare yourself for the bot-to-bot customer process. Even though these services are important to customers, the purchasing process usually isn’t. Once we all have digital assistants, it’s highly likely that we’ll just give Alexa or Siri the instruction to go out and find the best insurance or mortgage rate. And she’ll be indefatigable doing it, tirelessly negotiating with the companies’ bots to get us the best deals.

Democratisation of education

AI in education aims to improve learning outcomes on an unprecedented scale, with global access, personalised learning journeys, and optimised course content. The accelerated change that’s happening in all aspects of our lives means that we’ll all probably need these new approaches to learning, just to have a hope of keeping up.

So with these changes, and more, in the pipeline - how should you and your company prepare?

  1. Create an organisation ready for change

    It’s predicted that our society will change more in the next coming 10 years, than it has during the past 50 years. As humans we have a built-in resistance towards change. Put it like this - if you come home to your partner with the words “Darling, I think something needs to change!”, the following conversation probably won’t be relaxed and joyful. It might be better to start the conversation with “Let’s try something new!”

    Most digital transformation projects focus on the system solution, but forget about the people. We’d suggest creating a capability program, and letting the employees define how to best reach the vision. Equally important is to ensure that top management is connected to the customer reality. After a number of years in management positions, it is easy to lose connection and miss out on fast changes in the market. Reverse mentorship, participation in customer surveys, or just regularly taking customer phone calls will create an important reality check.  

  2. Capture all relevant data for your business and digitize everything

    So what data is relevant? It’s of course hard to say, in a changing climate, but start with your central customer journey. If you define your customer journey from a data perspective, it will create a good understanding of what data you have, and what data you will need, and what data that can be captured, bought, or created.

  3. Don’t underestimate the pace of change. Exponential growth can catch everybody off guard!

    But it won’t be enough to just have people onboard that embrace change. Other important success factors are creating a framework to measure the pace of change, and to be open minded. The Nordics were at one point driving digitization globally, but now digital evolution is happening much faster in China. Define which drivers that most likely will affect your business and focus on the leaders in those areas in order to make sure that you develop in line with the market expectations.

    Equally important is to drive innovation and embrace creativity. At an extreme rate of change, it won’t work to only follow the market, you have to invent the future. And that will cost money, and a budget for constant development is best created with high-flexibility, which can be reached with a strong focus on minimizing fixed costs in the company.

Hopefully this gives some guidance to your way to become data driven. The conclusion are that competence, courage, and creativity will all be equally important to harness the future. Like Eleanor Roosevelt once said The future belongs to those who believe in the beauty of their dreams.

About us - T(w)o digital immigrants figuring out how to thrive in an accelerating world

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We met less than a year ago, and realised the potential synergies from our different, but overlapping, backgrounds. We’re both independent business advisors, who help companies to align and implement their technology strategies. We have both driven business change at the highest level, and share a passion for technology, agility, transformation, and sustainability.

Recently we’ve been growing concerned about many big European companies falling behind in digitalisation. Connected with that, we’ve noticed several companies falling to spot threats to their customer value proposition. This blog is the result of our discussions on these topics, and is our attempt to help companies realise and react to the threat and potential of an accelerated future.

Cecilia Hjertzell
Swedish entrepreneur and co-founder of CMO goes Tech, an international network for the CMOs of the future. With almost 20 years of extensive experience within digitalization, Cecilia serves as board member and senior business advisor to a number of large companies in their digital transformation. Cecilia is a frequent keynote speaker on marketing innovation and consumer trends, in international leading forums, and co-author to a book about the Gig Economy. Cecilia’s past experiences include working in leading marketing positions, as well as co-founding a successful Martech Management Agency.

James Trunk
An immigrant from the UK, who’s now a Swedish citizen. James is a technology advisor, with almost 20 years of experience building successful digital products and high performing teams. James started his career as a software developer and eventually became a CTO. Now he works with investment banking, where he helps companies to align their business and technology strategies, and secure funding to optimise their growth. James recently co-developed an exciting new approach to software architecture called Polylith, and occasionally finds the time to teach programming on YouTube.

Balancing on the Hype Cycle

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The world’s largest Digital Marketing Conference, &THEN, has just taken place in Vegas. Among the hundreds of keynotes and seminars, there was one in particular that stood out. Warren Kornblum, the former CMO of Toys “R” Us, shared his learnings from the disappearance of a global brand.

You’re never too big to fail
— Warren Kornblum, former CMO of Toy’s “R” Us

Kornblum highlighted a number of early warning signs:

  • Losing sight of and touch with your customer

  • Refusing to accept change

  • Refusing to embrace technology

  • Assuming that past greatness will guide you into the future

  • Falling in love with your product or service - not your customer

  • Only managing the business you are, not the business you’ll become

  • When leadership thinks you’re too big to fail

Each one of these points is interesting enough for their own article, but we’re going to start with the one that’s closest to our hearts and a frequent reason to frustration; company’s refusal to embrace technology.

Among the companies we’ve worked with, we’ve noticed that new technologies rarely get examined with the same level of scrutiny as other high impact trends. When it comes to regulations, consumer behaviours, market trends and other areas that give us good predictions for the future, companies tend to follow a strict process to evaluate their impact and likelihood. When it comes to new technologies, it appears that much less due diligence is applied. Even though digitalisation has been top priority in every business strategy for the past decade, the level of research for suitable technology solutions still seems to be on a basic level. If research has been carried out it’s often enough for someone to have read about a technology on the latest Gartner Hype Cycle, or have a strong gut feeling, or even just “this seems like a cool solution”. You might think we’re exaggerating, but we’ve actually seen these situations play out.

Why does this happen? Well, there are probably a number of reasons. And that’s not what we think is most interesting to focus on. Instead we want to shed some light on a better way to structure your technology selection process.

We recommend that new technologies should be evaluated from three different perspectives. None of which require huge amounts of effort, or high levels of expertise to carry out - but we promise that they will give you a stronger connection between technology investments and business results.

So let’s go!

1) Likelihood - and how to predict it

How likely is a particular technology to survive the Hype Cycle and become a game changer for your industry? In some industries, that can be a “billion dollar question”. When the stakes are that high, it’s paramount that our strategic business- and technology decisions are based on more than just our gut feelings.

Luckily, there is a way to significantly increase the accuracy of our predictions. It’s called Bayes’ Theorem. In a nutshell, Bayes’ Theorem helps us to balance new information with prior knowledge.

As an example, only 15% of doctors could correctly predict the likelihood of cancer in a patient who had a positive mammogram result. The doctors fell into a common trap; they overvalued new information (the positive mammogram), over crucial prior knowledge (that only a small percentage of women actually get breast cancer). Bayes’ can help us to avoid similar mistakes in business.

However, to accurately align our strategies with upcoming technology trends, we can’t just rely on predicting the likelihood of a technology’s Hype Cycle survival. We also have to assess its potential impact on our market.

For example, it’s becoming more and more likely that VR will survive the Hype Cycle and become a mainstream technology. When applied to entertainment and education, there’s little doubt about VR’s potential impact. However, when applied to banking, VR’s potential impact is less evident. You could argue that a banker will have client meetings in VR, but we think it’s more likely that client meetings in the future will be bot-to-bot conversations. That’s why it’s important to predict both likelihood and impact.

2) Transformation not reinvention

You rarely throw away all your furniture when you move to a new home. Perhaps an odd comparison, but let’s explain what we mean. When transforming your tech stack you should start with a inventory of your current solution. Your existing architecture should be a guide on how to design your new house.

In addition to functionality you also need to understand the competence and culture of your constructors/developers. Choosing a solution that is not in-line with that culture may lead to disappointment and even defection amongst your team, giving you another huge problem to solve. So before deciding for a complete makeover - make an analysis on your internal competences and preferences. In our experience, this will make your technology transformation faster, cheaper, and smoother.

3) Product/market fit

Product/market fit is the concept of assessing a company's value proposition, customer segment, relationships, and distribution channels. Historically, it’s been connected with startups and launch strategies. However, the velocity of technological change is accelerating, which we think has changed the rules of the game. Now we think that even established businesses should be continually assessing their own product/market fit, as new technologies can completely change all aspects of that equation.

Let’s return to the Toys “R” Us example. All parents know that toys are still in high demand, so why wasn’t that enough to save one of the world’s largest toy stores? If we look at it from the perspective of product/market fit, then we start to see something interesting. Toy “R” Us didn’t get caught off-guard by a new customer segment or changing relationships, they got caught off-guard by the same situation that sank Blockbuster, and almost sank Kodak: a technology shift that affected distribution channels, and greatly affected their customer value proposition. Put simply, Toys “R” Us didn’t react fast enough to Amazon, in the same way that Blockbuster didn’t react fast enough to Netflix, and Kodak didn’t react fast enough to digital cameras.

How can your company avoid making a similar mistake? One approach is to keep a close eye on the Hype Cycle, to create a culture of transformation, and to continually check your product/market fit. If you have any questions on these topics, or feel like you need some assistance then feel free to get in touch with us.

About us - T(w)o digital immigrants figuring out how to thrive in an accelerating world

Cecilia James small.jpg

We met less than a year ago, and realised the potential synergies from our different, but overlapping, backgrounds. We’re both independent business advisors, who help companies to align and implement their technology strategies. We have both driven business change at the highest level, and share a passion for technology, agility, transformation, and sustainability.

Recently we’ve been growing concerned about many big European companies falling behind in digitalisation. Connected with that, we’ve noticed several companies falling to spot threats to their customer value proposition. This blog is the result of our discussions on these topics, and is our attempt to help companies realise and react to the threat and potential of an accelerated future.

Cecilia Hjertzell
Swedish entrepreneur and co-founder of CMO goes Tech, an international network for the CMOs of the future. With almost 20 years of extensive experience within digitalization, Cecilia serves as board member and senior business advisor to a number of large companies in their digital transformation. Cecilia is a frequent keynote speaker on marketing innovation and consumer trends, in international leading forums, and co-author to a book about the Gig Economy. Cecilia’s past experiences include working in leading marketing positions, as well as co-founding a successful Martech Management Agency.

James Trunk
An immigrant from the UK, who’s now a Swedish citizen. James is a technology advisor, with almost 20 years of experience building successful digital products and high performing teams. James started his career as a software developer and eventually became a CTO. Now he works with investment banking, where he helps companies to align their business and technology strategies, and secure funding to optimise their growth. James recently co-developed an exciting new approach to software architecture called Polylith, and occasionally finds the time to teach programming on YouTube.