A while ago, I had the pleasure to listen to Amin Toufani, the head of the Adaptability University. He did a presentation for Brightline. PMI’s Brightline is a Project Management Institute (PMI) initiative dedicated to helping executives bridge the expensive and unproductive gap between strategy design and delivery. It was brilliant.
He started his talk with how exponential technology development has doubled our life expectancy in the last 100 years, integrated circuits are now more than 30,000 times faster than they were in the 1960s. DNA sequencing is a hundred thousand times cheaper compared to 2001. The smartphone in your pocket is 200,000 times the speed and 2 million times the memory of the computer that put a man on the moon.
We see the same effect in artificial intelligence, biotechnology, nanotechnology, material science, quantum computing, and any other technology you can imagine. Science fiction is becoming science fact.
Amin used solar as an example. Solar panels have become 250 times cheaper since 1975. Solar is going hyper exponential. By 2030 our energy crisis is over. And it is taking the fossil fuel industry by surprise. Because we humans find exponential very difficult to understand. We are linear.
Five critical waves
This decade will be remembered for five critical waves. Biotech, AI, quantum and blockchain are all going the same way as solar. In solar, the marginal cost of solar energy drops below all forms of energy without government subsidies. Before 2030 blockchain will be the ledger of choice, quantum computers will be more powerful than digital computers, biology will upgrade and augment humans, and AI will become more powerful than the human brain in the vast majority of business applications. It is Moore’s law on steroids, and that curve has proven itself even in periods of upheaval such as wars and now COVID. COVID is another accelerant.
We will see a demarcation around 2025 (that is three years from now!). It will change all aspects of our lives, including the way we run our organisations. Hence the need for gymnastic organisations. Read “Humanocracy“.
Fundamentally we are moving away from the economics of scarcity towards the economics of abundance. That sounds fantastic, but again the impacts are profound. And this sounds pretty straightforward. In reality, it turns out to be much more complicated than people initially thought. Because a side effect of exponential and abundance is that it has economic side effects. When you solve big problems, you tend to compress GDP as opposed to increase it. Abundance makes things cheaper and eventually free (free energy, free water, free transport, free internet, etc.).
Amin used the example of electric self-driving cars. Did you know that about 3% of global GDP comes from the death and destruction of car accidents? With smart self-driving cars, you will no longer have accidents. That is before you realise that electric cars have about 20 moving parts as distinct from the 10,000 moving parts that we typically see in a gasoline vehicle. With a battery that will likely last for a million miles. Do the sums how that is impacting GDP. It shows how GDP is the wrong measurement tool for the future and how important it is that policymakers understand that. Japan is a case in point. The same goes for the future CEO. The metrics are going to change (in a gymnastic organisation).
He plotted a distributing picture of where this could lead if we don’t get to grips with this. Exponential technology deflation outpaces any attempt to create “healthy” inflation and leads to printing money, debt crisis, social unrest, trade wars and eventually real war.
The Titanic was warned five times about the iceberg by other ships in the vicinity. It is called change blindness. When change is too little, the human brain doesn’t register it. It is the story of the boiling frog. Frogs won’t notice a change in temperature until it is too late. On the other hand, when change is too big, the human brain also doesn’t register it properly. It is too weird. It causes cognitive dissonance.
That means we all have a moral responsibility. We need to increase our shock absorption ability. We need to reform our education system, the way we organise ourselves and the technology we invest in. We are in a crisis.
Your business model is under threat
The picture for industries and companies is pretty clear. Production costs are dropping. Distribution costs are falling. Thanks to these technologies. The ease of entry by competitors is increasing. Automation is growing thanks to artificial intelligence and robotics. Energy costs are dropping. Automation costs are dropping (thanks to, for example, the citizen development movement). The big picture is that we’re headed towards a pretty serious oversupply and consolidation scenario. Very few organisations are prepared for this reality that is fast approaching.
Exponential technologies do create massive threats, massive risks, but also massive opportunities. You need to strike a balance. In the gymnastic organisation, it is creating the balance between super structured and hyper agile. Or in the words of Amin, the balance of being empowered by these technologies and at the same time watching out for the disruptive threats.
And this is where it got exciting as our thinking seems to very much overlap. It starts with digitisation. You can predict the near future of almost any industry by looking at digital twins. What are digital twins? What is the digital twin? A digital twin is a digital representation of your organisation. Low code and no code are perfect for this.
He used the example of a digital twin of a bicycle accident. What if we could look at the final second before somebody falls from a bicycle? And create a digital representation, a digital twin of all of those dynamics. Of the person on the bike and the position of the bike. Everything about biking. What if we looked at thousands of bicycle accidents and mapped out that digital twin of the final second before the bicycle accident? It is exactly what a startup out of Sweden did, and they came up with a bicycle helmet with an airbag that inflates in one 10th of a second. It is eight times safer than a bicycle helmet. Studies have shown that if you’re wearing a bicycle helmet and involved in an accident that includes head impact, you’re around 92% likely to end up with head trauma. If you’re wearing hosting their airbag, that percentage drops to under 5%,
Creating the impossible
That’s the power of creating the digital twin and then leveraging all of these other exponential technologies to create value that was previously impossible. This is happening across every single industry that we have looked at. More and more industries and organisations are awakening to the power of the digital twin. If you look at some of the most famous stories, startup stories coming out of Silicon Valley and all around the world, it is the story of this digital twin innovation.
Uberisation of your industry
Uber created the digital twin of cars and people, Airbnb created the digital twins of homes and their availability. Facebook is a digital twin of your social network. Yelp is a digital twin of public opinion. Fitbit is a digital twin of your physical activity. Slack has a digital twin of team conversations. Reflect on the power of digital twinning and ask yourself, how can you use it for your organisation?
In that digital twin, your customer needs to be the focal point. They should be the centre of your universe. You need to recognise that the customer is very busy. Your customer is juggling many different things. That means as you think about the evolution of your value proposition, you want to think about your value proposition, ten times faster, ten times cheaper, ten times easier, and ten times more predictive leverage the power of exponential technologies to come up with your 10 X strategy. In other words, what you want to do, is to be more like Google and Amazon before it is too late. Because they are applying this exact formula of the digital twinning process and this 10X strategy to every single industry they can. And progressively, there’ll be visiting you in your industry as well.
If you combine digitisation, just in time, with the drop of the marginal cost of production, it means you can hyper customise your value proposition, and you can go after the long tail of the market.
It is happening in your industry. You are going to be disrupted. The 3s in the gymnastic model. Shock, speed and surprise. Anticipation, prediction and adaptability. Amazing until it is tragic. Amin used the example of Zoom. In May 2020, Zoom achieved a market capitalisation of $50 billion. This is more valuable than all American based airlines combined. These airlines are in the business of connecting people. Zoom is in the business of connected people. So while the form of their industry has been disrupted, the function has remained the same.
And it happened incredibly rapidly. In other words, for decades, nothing happens, and in weeks, decades happen, this is a shape of disruption that we see again and again and again, and it means we need to be prepared.
You need adaptability
Societal change market change is accelerating. The pace of human adaptability is not. Human adaptability is lagging behind. Our ability to respond to change subtly is the strongest predictor of our success in this new world. And we know when there is chaos, when there is uncertainty when there’s volatility, the human brain gravitates towards IQ, we try to surround ourselves with very intelligent people. We build smart teams. We change our organisational structure. We develop our change muscles.
Recent research has shown that IQ does not predict success beyond the first two years on the job. Let me say that again. IQ does not seem to be predicting success. You also need EQ and now AQ.
It is the language of the gymnastic enterprise. Digitisation, adaptability, agility, coding, AI, technological enablement, a new way of working, unlearning, innovation and empowerment. He made me realise that gymnastic organisations should also have a 10X attitude.
With the adaptability university, Amin has developed the adaptability quotient. If the world is changing exponentially faster, your ability to respond to that change is the strongest predictor of your success.
You can find more information here. https://www.adaptability.org/.