Cut outs #17

Random Network. Courtesy of screenpunk / Flickr.com 

Innovation: The value of Networks vs. Nodes

Automotive: How autonomous vehicles will change the insurance industry and analytics can help automotive firms find profits in the after sale and service markets

With the trend in bank branch closures continuing, how can branch networks be reimagined for the digital era?

Practical uses for Blockchain: Where and how can it be applied?

Taking risks and accepting failure: important ingredients for successful leadership through digital change

YouTube to launch paid music streaming service in 2018?

Market Trends: Early Stage and Seed Investment markets cooling off?

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Cut outs #16

Abstract 2014 073

Abstract 2014 073. Courtesy of Andy Saxton / flickr

Digital Manufacturing 4.0: a future made by people

Using AI to bring ‘vision’ to the blind and partially sighted: Aipoly, CES 2018 Honoree for Consumer Technology Innovation

Network Network Network: WeWork buying Meetup

The AI of everything: AI refreshing the parts other technologies cannot reach

The power of disruption: Start-ups that seek to ‘disrupt’ get more funding than those that seek to ‘build’

 

Creative disruption

BBC’s Ben Thompson hosting Tech London Advocates’ Global Tech conference

Last week I got to attend the Global Tech Advocates World Tour conference in London. It was a great event with a wide range of speakers from a variety of backgrounds, and a fantastic venue in Here London at the Olympic Park in Stratford.

From the discussion and presentations one thing that struck me in particular is the potential to use digital technologies to modernise ‘traditional’ industries like manufacturing.

As you might expect, there was a great deal of conversation focused on growth and opportunity in emerging sectors like fintech and medtech. Both these sectors and others are important to the economy, offer a great deal of potential for innovation and are supporting burgeoning start-up communities. Yet the attention they attract means it can be easy to overlook the potential for growth in established firms and industries – through incremental innovation or radical change.

Another conspicuous theme of the conference was uncertainty in the economy and society emerging from the Brexit decision and the political climate in the US – to name two of the most conspicuous factors discussed.

But, change and disruption can also bring opportunity for businesses willing to adapt. According to research by the World Bank, global growth is firming up. Growth forecasts are projected to strengthen to 2.7 percent in 2017 and 2.9 percent in 2018-19, and in emerging markets improve to 4.1 percent in 2017 and reach an average of 4.6 percent in 2018-19. For core manufacturing and trade industries this indicates potential for growth.

For established firms and industries, grasping the growth opportunity also means developing a capacity to adapt. This is especially important when growth involves adopting a new technology, or collaborating with new partners. According to IBM (my employer), 63 percent of executives in industrial products manufacturers say the competition from new and unexpected sources is beginning to impact their businesses, and 57 percent indicate that the boundaries between their industry and others are blurring. These are patterns I see occurring in other industries too. The key to dealing with them successfully is alignment: in strategy, operations, culture and management style. All four contexts are crucial for the firm to evolve and when the goal is innovation, change must be managed across all of them simultaneously.

The most crucial area – and the one that most commonly gets overlooked – is culture. Adapting or scaling a culture is arguably the hardest challenge for a business striving to grow or innovate. When the culture is not being actively managed and the workforce isn’t sufficiently engaged, then efforts to grow can rapidly unravel, regardless of how robust the strategy or operations plans might be.

Cognitive computing (AI), Virtual and Augmented reality, Blockchain, Cloud and numerous others all offer massive opportunities for traditional industries and established firms to disrupt themselves and harness their scale to great effect. But at the heart of a successful transformation is the coherency of the brand and the culture.

Cut outs #15

Green Shoots. Courtesy of Honelace / Flickr

Banking goes (totally) mobile: Orange France launches 100% mobile bank*

70 Years of VC Innovation: Where the modern VC ecosystem emerged from, how it’s evolving and what that means for start-ups now

Fit for disruption: Pay-by-the-minute gym app challenges traditional membership model

Industry convergence: Can consulting firms do advertising?

One for all parents (in fact, worth reading whoever you are): How is mobile technology affecting the behaviour and well-being of adolescents?

It’s already a crowded markets, so can Nespresso make it on the high street?

Acer makes moves in VR and becomes the majority owner of Starbreeze’s StarVR

*Disclosure: IBM client

Ideation vs. Innovation

https://www.flickr.com/photos/caitlinhouse/6527165927/in/photolist-aWMr2z-7MdpUa-7MhPLA-f7PHw9-aKyTsi-r6tZZK-7MdvsH-dvdASJ-7MhXJ1-cikK-8sXjM1-7CvoN2-7FDvWW-797NUX-7MatVE-rscWLt-hhij6g-S1gSd1-85fxz2-9dwWE9-7Me7zt-7Mea3B-7X3Dbs-7Mi6vo-7GdkvP-pHmmYA-7MecPK-7GdhC8-7Fh24E-4Bom3q-4GfAWe-7Mi2KG-7KN8yh-7MdURB-q9HNSF-7MhLkw-7Gdjt8-7MdD3n-7MdMqX-7MdMBv-eF4hdX-8sUmN4-7MdNhZ-7MignN-7Mekck-8sUnkB-7Z8Km3-67y7Bk-7FyZ2c-7YD3sF

Courtesy of Caitlin H / flickr

Like many people who live or work in London, I’ve been following the story about Transport for London’s decision not to renew Uber’s licence to operate.

I mostly get around the city on foot or by Tube, but I’ve used Uber there and in other places too. It’s a great service and simple to use, which explains the 40,000 drivers and 3.5 million people signed-up in the capital. In comparison, there are around 20,000 licenced black cabs operating in London. With so many cars on the roads, Uber seems virtually ubiquitous, so the shocked reaction when the news of TfL’s decision broke isn’t surprising.

As expected, Uber has appealed against the decision. The new CEO, Dara Khosrowshahi, seems eager to build a dialogue with TfL and avoid a legal battle that will cost money, absorb the management’s energy and waste time. Indeed, with competition in the mobility services space hotting-up, time is perhaps the commodity that Uber can least afford to waste. Taxify faced similar challenges from TfL as Uber did on their attempt to launch in London earlier this year, but are making progress in their bid to gain a licence. Lyft is attracting investment from major automotive firms like GM and Jaguar Land Rover, and has managed to avoid the kind of regulatory scrutiny and bad press that Uber has attracted over the past few months.

Given the number of Uber drivers on the roads and the size of the firm, valued at $68billion at its last funding round in 2016, it’s easy to think of Uber as an established company. In reality it still has plenty of maturing to do; accumulated losses of around $6billion and a subsidy model for drivers, which only yet appears to have created a fragile profit model in some cities, both attest to this. Ultimately, investors are betting that Uber will own the software and data that manages a massive global transport industry. With minimal capital costs and a large market share, the firm’s scale will create a network effect that will grow the business. That’s the vision, but there’s a long road ahead and plenty of competitors in the rear view mirror, if you’ll pardon the puns.

There are lots of insights to gain and lessons to learn from Uber’s journey so far, and particularly from the situation in London. For me, one of the most interesting is how it illustrates the difference between ideation and innovation. It’s one thing coming up with an idea, it’s another thing to put that idea to work so that it can grow and create value. This is a process that never truly comes to an end. As markets evolve, customer expectations change and technology develops, companies must keep adapting their products, services and brands to stay valuable to the people they serve. This process, and the recognition by the company that ‘the job is never finished’ is at the heart of what it means to be innovative.

Uber has arrived at an important landmark stage in its innovation journey. The company’s now large and high-profile enough to attract serious scrutiny from established regulatory authorities, and not just any regulator, but in TfL, one of the largest and most complex metropolitan transport authorities in the world. Uber challenges established models of transport provision and in its short history has made the industry and the public think differently about what mobility and vehicle ownership mean. This has created all kinds of possibilities for travel and stimulated an innovation effect across the transport industry as a whole. Uber has grown by thrusting into new markets and asking forgiveness, rather than permission, courting plenty of controversy along the way.

Part of the innovation effect Uber has stimulated is to encourage authorities to think differently about how mobility industries are regulated. This can create opportunities for established businesses, like taxi companies, as well as emerging firms like Uber, if they are willing to take the opportunity to adapt. But in the process of innovation, Uber must be prepared to adapt too and receive some of the wisdom of companies and authorities that have operated successfully in London and other cities for several decades. Innovation means not only the bold pursuit of an idea, but also the messy stuff of negotiating organisational politics and navigating through complex stakeholder networks. As the innovation grows these challenges become ever more real and harder to ignore. Yet they can also offer a great learning opportunity, training the firm in its capacity to absorb new ideas. So while Uber continues to provoke change, it could do itself a great service by working with, rather than against, authorities like TfL. It might be surprised by what it can learn from the experience.

Cut outs #14

Al King / flickr

What makes a good life? Lessons from the longest study of happiness and the World Happiness Report

No body’s perfect: consumers prefer products with imperfections because they feel more unique, according to HBR

Switzerland is getting a network of medical delivery drones to move samples quickly to labs and get supplies in emergencies

Internet giants shift US policy strategy to the defensive as Senate moves to strip away legal protections that shield companies from liability for the activities of their users

Lessons from history: How the rise of Sears predicts Amazon’s strategy

Digital capabilities: Research on what it takes to prepare organisations for digital innovation

Digital platforms: Publishers looking beyond Facebook and finding better returns from other platforms

The subtle art of diplomacy

https://www.flickr.com/photos/fudj/289154758/in/photolist-rxZCS-djn8cz-9v2Deo-o2ApuS-5XuijU-wfWbe-aFKRQ-cFEDgS-5sWgaM-7HpHCH-7SZQt3-8poCpZ-7arJdk-aaH2Qj-a2hjyU-y69oyF-cy5FCS-odbZ4N-4frX9X-hQ5kwM-4BzMeN-djn3Ys-GWTEd7-6WpXin-5gnFAy-64DAjY-yRUegv-7Cs6qX-4ErotT-N6diVi-49gB8m-Dvkzij-xTGpX5-zhMhWi-J1CFjN-G3cqbG-K6PjA1-rUd2Y5-kRrbAZ-tYWYe1-VZtLst-j6BnhQ-XvidoH-q6T34B-fjtYJr-VXMEzC-81JzpW-5eCJGV-dgw44-dCa7tH

Paul Lim / flickr

Over the past week, Donald Trump has addressed the United Nations for the first time, delivering what the FT described as a ‘tirade’ against the United States’ adversaries. Brexit skirmishes continue within the Conservative party and with the European Union. And Germany prepared for an election amid growing tensions over immigration. For the art of diplomacy, it’s been quite a few days.

While all these events were unfolding, an event I attended about the cultural challenges of international business made me think about them from a fresh perspective. In business, as in politics, relationships are foundational to success. The subtle understanding of your colleagues and clients – or diplomats and heads of state – is crucial if you are to stand any chance of achieving what you want. It reminded me of the time I spent working in China, where many of the unconscious assumptions I had about how business should be done were challenged, often about things that might at first seem quite innocuous in the West, but in a different culture can leave a lasting impression on co-workers.

Whether on a local, national or an international level, cultural understanding has always been an important ingredient for a successful business; it’s difficult to form relationships without it. In a more uncertain global environment, with Brexit approaching, the World’s largest economy edging towards more protectionist trade policies and an increasingly fractious political environment, cultural understanding is arguably more important than ever.

Heads of state need to hone this skill to rise above the uncertainty and demonstrate true leadership. Managers of businesses need to do the same. The change we’re experiencing – stressful and painful as it may be – will present opportunities in the new relationships and markets that will emerge. Spotting them and knowing what to do will take vision, some courage and no small amount of diplomacy.