Have Covid and AI been extreme Darwinian catalysts to change?

Have Covid and AI been extreme Darwinian catalysts to change?

 

 

Covid was a Darwinian catalyst, at least in my view.

A decade of slow change was supercharged into 6 months as businesses, institutions, and individuals, struggled with the need to change rapidly, and radically. It also unleashed an unprecedented innovation cycle in medical science that will have long term impacts on drug discovery.

In November 2022, another Darwinian catalyst struck. Open AI launched ChatGPT into the wild, setting off a chain reaction that surpassed the impact of Covid, which has since become endemic, and we have largely stopped worrying.

We have yet to understand the longer-term impacts of AI on social dislocation, personal security, and the ways in which the largess can be fairly spread across the community.

The trends in both cases were all there for those who looked closely enough with an open mind to see.

Pre-Covid it was clear that there were too many cafes, and we were generally over-shopped. Home delivery was increasing, as was remote work. The installation of ‘smart’ devices in factories and homes was normal, and product differentiation based on digital features was everywhere. Yet, it was slow going.

We had a binary mindset, the cake was a given size, and any change to the way it was sliced up meant there were winners and losers. Nobody wanted to be the latter.

Suddenly, in two whacks behind the ear, the cake has changed size and shape radically. The pre-Covid/AI status quo that included many points of friction and often unseen waste, previously sacrosanct, have been swept away.

All this costs money, so the cake has changed ingredients as well as shape and size. The suppliers of those ingredients have morphed into a few monster corporations that will continue to change the shape of our cake with little or no public oversight. Governance has become whatever it takes to make more money, as the power of regulators is substantially diminished.

This level of uncertainty has made us very jumpy, unwilling to trust, and wary of the future impact on our finances, security and familial connections. It has also made possible development of products and services inconceivable previously.

If you are a glass half full type, the opportunities are endless. If you are the other sort, find a comfortable place to hide, if there are any left.

 

How would Darwin see human evolution post covid & AI?

 

Header: Is a photo of Ghandi leading the ‘Salt march’ in 1930 which was the catalyst to the recognition that British rule over India needed to end.  

 

 

 

How much has marketing really changed?

How much has marketing really changed?

 

 

If you asked a room full of marketers if marketing had changed in the last decade, you would get most of them telling you it had changed radically.

On the surface it has, the digital revolution has taken marketing by the neck and given it a great big shake.

There has been an explosion of sales, media, connection, and payment channels, customers are more wary, and do their own research before a marketer knows they are in the market. So called ‘content’ has almost infinite reach, but the frequency is rubbish, as there is so much digital noise, and so much competition for attention, that most of it is the digital equivalent of yesterday’s fish wrapper from the newspaper obituary section. The investment in marketing technology to manage all this has also exploded.

There is a welter of research and opinion that confirms the notion marketing has changed, some by very credible organisations.

I asked myself the question again, after stumbling across this report by Adobe, one of those credible organisations that supports the ‘yes’ vote, and came to a partly different conclusion.

Marketing has changed, absolutely, at the tactical level. The means by which marketers create and deliver a value proposition, then turn it into a transaction is unrecognisable from just 5 years ago. However, tactical implementation is just a small part of the pie.

Organisationally, marketing has changed a bit. Generally, it is still a function in a group of functional silos that reports to a CEO. A range of new titles have emerged, Chief Marketing Officer, Chief Engagement Officer, and so on, but that does not change the essential reporting and accountability of those in senior marketing roles. The marketing organisation in large enterprises has also siloed, now there is digital, customer service, technology, and a range of other functional roles within marketing not present 5 years ago.

Strategically, marketing has changed little if at all. The role of marketing is to tell the future and adjust the value proposition to customers ahead of the changing preferences and behaviour. That has always been the case, and remains so.

The only strategic change I can see is one of leadership.

In the past, marketing has generally been a passive corporate player, relegated to the role of managing one of the largest expenses in the P&L. Now the value of enterprises is so much more in the hands of intangibles, that marketing is increasingly demanding a seat at the big table. This requires that marketers are able to lead their peers and boss. Unless they can achieve this position of leadership, they will remain the simple gatekeepers to one line in the P&L, rather than being responsible for the future health of the enterprise.

Look at it from the top down.
Marketing has changed little strategically, but strategy is by far the most important component.

It has changed organisationally, and while it is important, in most areas, it is not a game changer.

Tactically, marketing is unrecognisable, but who really cares. Tactics are short term, able to be changed in real time as the situation evolves. Marketers need the organisational capability to be able to change in real time, but the impact of failing to do so is limited.

The marketing groups that will be successful into the future are the ones that are successful leaders of their organisation. To achieve this role of leadership, they must be able to identify the priority areas for investment and activity, as well as being able to remove the organisational constraints that operate in every enterprise, that are not directly accountable to marketing.

Well, they are not accountable until marketers are in the corner office, which should be happening more and more as they are the future tellers. Those who currently occupy that office are usually the engineers, lawyers, and accountants who are good at reading the past in the data, and hoping the future looks similar.

Who is next in your corner office?

 

 

4 hurdles to successful ‘digitisation’

4 hurdles to successful ‘digitisation’

Often, I hear the term ‘Digital Strategy’ used as if it were an end result, some discrete set of activities to be completed.

To my mind, this is a misuse of the term.

As it is usually used, ‘Digital’ is all about the devices, the technology, whereas the value in digital is elsewhere. It is in the ability to get things done, differently, more quickly, efficiently, and in a distributed manner by those best able to complete the activity with the minimum of organisational friction.

It is about the business models enabled, the understanding of customers, ability to visualise the unseen, and communicate it clearly. It is not about the RFID tags, VR, and all the other enablers of digital, it is the outcomes that count.

Your strategy may be enabled by digital, but you do not need a digital strategy any more than you need a telephone strategy. They are both just tools to be leveraged.

Management of these changes is confronting, there is not a lot of precedent to go by. This is particularly the case now following the explosion of AI onto the scene. There is a lot of advice around, often delivered by those with a stake in selling you another product or service. However, it seems to me that there are a few simple parameters worth considering.

Functional Silo thinking is poison. The communication enabled by digital is inherently cross functional, better reflecting the way customers and suppliers see us and want to interact. Functional silos have little to do with optimised outcomes anymore. They have outlived their purpose and value.

One step at a time. While the pace of change is getting faster, and the pressure to keep up increasing, we all know what happens when we try and run down a hill really fast, we end up arse over tit. Matching the speed of change to the pace that your enterprise can absorb the change is pretty sensible. Of course, if you are the slowest in the competing pack, it may be better to get out while you can.

Digital is a team game. Hand balling digital responsibility to the IT people is a mistake. You will end up getting what they think you need, which is rarely what you really need. The real challenge is engagement of people not really focussed on digital. The primary example is in the space of marketing automation. Suddenly it exploded, way beyond the capabilities and experience of most marketing people, who are nevertheless now investing more in tech than the IT people. It is essential that the right capabilities are built in the right places. Finally, everyone affected, which is everyone, needs to be in on the secret, with all the options, challenges, and opportunities transparent. The unknown is the father of all sorts of ugly children.

Think long term. Digital transformations are not just about which software you will install to automate a process. Is more about what the business may look like in 5, 10 years, and what steps do you need to take over that time to reman relevant. Technology, much of which may not yet be available, will play a vital role in that evolution, but they remain tools of the evolution, rather than the main game.

Header credit: My thanks to Tom Gauld in New Scientist.

Revolution by digital: A survival necessity.

Revolution by digital: A survival necessity.

 

‘Going digital’ sounds easy.

Sadly, it is not.

Almost every company I visit or work with needs, to one degree or another to be aggressively moving down the path towards ‘digitisation’.

Just what does ‘digitisation’ mean?

For most of my clients it means automating some or all of the existing processes driven by bits of unconnected software and spreadsheets, liberally connected by people handing things over.

It is a mess, and there is not one, or even a suite of digital measures that will address the whole challenge, despite what the software vendors sprout.

The world is digitising at an accelerating rate, so keeping up is not only a competitive imperative, it is a strategic necessity. Never more than now as ChatGPT burst onto the scene, compressing everything, and making the ‘digitisation’ drive one of life and death.

On of my former clients is a printing business, an SME with deep capabilities in all things ‘printing’ that enabled the company to be very successful, in the past. Their capabilities are terrific, cutting edge, if we were still in 1999.

If I use them as a metaphor for most I work with, there is a consistent pattern.

  • They did not see Digitisation as an investment in the future, rather it is seen as an expense.
  • There was no consideration of the application of digital to their product offerings, beyond the digital printing machines, and services beyond those that made them successful 20 years ago.
  • Their business model, beyond what is demanded by the two biggest customers, who between them deliver 34% of revenue, has not changed.
  • They have not considered digitisation of operational processes, beyond a 25-year-old ERP system. The system has not been adequately updated, and they only use a portion of the existing capability.
  • They have not modified their organisational and operational culture to meet the changed expectations of their customers, and the market.

No digitisation effort can succeed without the support of an operating culture that encourages ongoing change. Organisational processes can be modified by decree, but they will not stick. It takes everyone in the boat to be pulling in the same direction, in unison to make progress. This takes leadership, and a willingness to be both vulnerable internally, and a strong ability to absorb the stuff from outside. The leadership group must ‘get out of the building’. Not to smell the roses, but to see the lie of the land, and understand where the opportunities and challenges are hiding.

Coming to this point, where there is a recognition that change is no longer a choice, is where you are given one point out of a possible 10. Now you need to do something about it all to have a shot at the following 9 points. A daunting prospect for most.

The process has 5 easy in principle steps:

  • Map the existing operational processes so you know what to change, and where the gaps/opportunities are hiding..
  • Map and change the mindset of the people, so you understand the extent of the challenge.
  • Take small and incremental steps along a path that all understand leads to a digital future, which means that a lot of collaborative planning has been done.
  • Ensure that there are the necessary opportunities for all stakeholders, but particularly employees to grow and change with you. Those that choose not to, also choose to work elsewhere. There are no free rides.
  • Ensure the resources of time and money are allocated uncompromisingly to the long-term outcomes. It is just too easy to put aside something that is important but not urgent, for something that may seem to be urgent, but is not important to the transformational effort.

As noted, since the public release of ChatGPT in November 2022, the time before the liquidator comes around for those who choose not to change has compressed radically.

Most, if not all SME’s beyond the digital start-ups now cropping up like mushrooms after rain, will need outside expertise.

Consider that help to be an investment in survival, not a cost.

 

Header cartoon credit: Tom Fishburne at Marketoonist.com

 

Australia Day 2024. Here we go again.

Australia Day 2024. Here we go again.

 

January 26 again, and out come the strident calls for it to be changed, in one of many ways, as well as the equally strident voices calling for no change.

To me it seems to be just nonsensical chatter.

In any event, January 26 is a confection. Prior to 1935 it was generally known as ‘first landing day’, which it was not, or Foundation Day, which rates as a ‘maybe’. It was only in 1935 that all jurisdictions used the label ‘Australia Day’. If we must change it to satisfy the noisy few who get hot under the collar, the sensible option would be May 9, which is the day the first federal parliament met in Melbourne in 1901.

We should be discussing more important things.

 

Climate change leading to floods, fire, with pestilence to follow. Another mouse plague perhaps? The impacts of climate change are there for all to see. They are more pronounced than the most pessimistic scientific opinion of a decade ago, and yet at the government level, little is being done beyond lip service and press releases. Private capital is making all of the relatively modest investment occurring, I suspect contrary to our long term best interests.

 

Covid has not gone away. What about the next pandemic, are we prepared better than we were when Covid announced itself to the world? I see few if any steps that act as ‘insurance’ against the impact of the next pandemic. Press releases will not stop it, when it arrives.

 

Generative AI has changed our world. I confess to being excited and confused at the same time by the explosion of AI. It is such a game-changer, it feels a bit like watching the industrial revolution happening at warp speed. Depending on who you listen to, true AI, meeting Alan Turing’s test will emerge anywhere between a decade hence, and ‘probably never.’

We are now in a knowledge economy. This is a term thrown around for years, but for the first time for me at least, it really sticks. It begs the question: what is the basic unit of production in the knowledge economy? How do we measure it, organise for it, pay for it in an equitable and sustainable manner, and critically, how do we optimise the utility of the time we allocate to any task.

The impact of the last digital revolution was articulated by Moore’s law, the compounding time frame of which was 18 months. If we apply the same logic to AI, the compounding time frame seems to be about a week. This will result, if it continues, in a logarithmic acceleration of AI tools surging way ahead of the hardware that delivers the physical outcomes. Therefore, the processes that currently consume the time of people will be in the gun, with the hardware lagging. Instinct, experience, in a phrase, knowing where to look to join the dots will be the critical leverageable capability for the good jobs and career paths.

The pressures the explosion of AI brings to the foundations of our country are profound. In our public discourse, these challenges are not being touched on in any way. We prefer to argue about the current but completely unimportant populist nonsense that is irrelevant to the country we leave to our grandchildren.

As an aside to any discussion of AI, there should be conversation about the coming deluge of litigation surrounding copyright. As Newton observed of his breakthrough ideas, he ‘Stood on the shoulders of giants’. Did that standing involve plagiarism under our current laws? Did Da Vinci’s most famous illustration, ‘Vitruvian man’ involve breach of ‘copyright’ of the work of Roman engineer Marcos Vitruvius Pollio? (I ignore for the sake of the debate that the sunset in copyright would have well and truly expired on Vitruvius’s original work). Creativity is a collaborative and experimental process always using the shoulders of others. How we align that reality to the current copyright laws designed for a non-AI world will be a lawyers feast, and a nightmare for the rest of us in the coming year.

 

The Geriatric election in the US will be impacted by AI. Putin is a capitalist, reputed to be the richest man in the world, but nobody knows where all the money (or bodies) hide. However, he does understand ROI. He can spend $10 billion getting his red headed, narcissistic, sociopathic mate re-elected, and cut off the supplies to the Ukraine that way, or spend $100 billion crushing the armies of the Ukraine, and wearing all the current contributors, distracted as they are by the conflagration in Gaza, down to the point where they back away. While the US election is half a world away, and totally out of our control, the outcome will have an impact on our economy, foreign relationships, and perhaps our way of life.

 

Our foreign policy is conflicted as never before. We have the China hawks yelling at the doves, while China is our major trading partner, upon whose goodwill our current standard of living rests. In parallel, we are committed to a program of procurement of nuclear powered submarines to protect us from that same vital trading partner. When/if they arrive, they will operate in shallow seas to our north, entirely inappropriate for nuclear powered boats that require very deep water in which to ‘hide.’ That ignores the probability that by the time they arrive, there will be sub detector drones available in Bunnings, and the barrier of building from nothing a nuclear industry to support them was not, after all, insurmountable.

Meanwhile, there is armed conflict in Europe and the Middle East, both of which have the potential to suck us deeper into a morass that makes Afghanistan look like a Sunday school picnic.

 

The taxation system is a dogs breakfast needing urgent and complete reconstruction. Such a sensible step is way beyond the reach of either of the major political parties, driven as they are by institutions that demand maintenance of the status quo for their own selfish reasons. The lack of voter appetite for change, despite the obvious gaping  holes in the system ensures that no real change will happen until there is a genuine crisis.

Last week the PM reaffirmed the legislated tax cuts would come into force as legislated. This was a surprise to me, as I believed there would be changes, aimed more at the bottom end of the income scale. On Monday he flipped, and let everyone know there will be some changes, which will consume much of the political capital he has left. Despite being very modest cosmetic changes, nobody will be satisfied. The various aid and welfare agencies will be wondering aloud, where this government lost its social conscience, as the changes will not go far enough, and the opposition will run around yelling, again, that the sky is falling. Michele Bullock will have pencil poised, ready to point out that inflation will not be helped by the injection of money into the economy.

 

The housing crisis, one of our own making, will not go away irrespective of how many press releases and Band-Aids are sent around. It is a systemic challenge driven over the last 25 years, and treating it as anything but is a nonsense. Commentator Alan Kohler, who has a way of deconstructing the babble of economists, bureaucrats and politicians into common sense wrote a quarterly essay that contains plenty of sensible comment. If you have an hour, this webinar is useful. Alternatively,  this precis on the Michael West media site gives a very good summary in a relatively short read.

 

Meanwhile the alternative Prime Minister is urging retailers to stock piles of Australia Day ‘merch’ that does not sell. This trivial matter, which is none of his business anyway, is not a contribution to the acknowledgement that we live in a great place, currently celebrated on January 26. It is just a shallow, meaningless, populist, and cynical appeal to grab a fleeting headline, and enrage some who live at the shallow end of the gene pool.

 

A decade on from this 2013 Australia day post, the observation that in the future, the core challenges to our society I saw then, education, research capability, diminishing manufacturing capability, and the flogging off of our national estate remain. Absolutely unchanged.

Have we not learnt anything?

 

 

Do Luddites love AI?

Do Luddites love AI?

 

The Christmas break is a good time to have that delayed conversation with mad Uncle Charlie. Good old Charlie is a Luddite that the originals would have been proud of, we all have one somewhere. The conversation was about AI, a topic in which I claim little expertise beyond the bits I have read, and superficial fiddling I have done.

However, Charlie was adamantly opposed to any notion that AI was anything more than a gimmick used by computer companies to sell their devices.

In trying to make the case for the continued growth of AI, and stuff emerging, I used an old chestnut.

Compounding.

As Einstein observed, compounding is the most powerful force in the universe. The story of  the peasant who did a favour for the emperor and was rewarded with anything he wanted and asked for a chess board to be covered with grains of rice, doubling at each square explains it. At casual observation, easy, but the maths is different. There are 64 squares on a chess board. Doubling the gains at each square ends up in billions of grains of rice. The first few are easy, 1,2,4,8,16, but after a modest number of iterations, the numbers really take off.

Digital transformation is similar.

One step compounds on top of the next, and next, and so on, until you recognise it is not a destination, it is a journey.

Fascinating to think we are at the very beginning of the journey.

An idea that has been attributed to many is that we overestimate what can be achieved in the short term, and underestimate what can be achieved over a longer period.

This is compounding at work.

If you think the developments of the last decade have been huge, unpreceded in history, I suspect the next one will make the last one look like it was snail’s pace.

Charlie has his good points, but he really is a devoted Luddite.

Header graphic is via DALL-E. A Luddite trying unsuccessfully to stuff AI back into its box.