Fast-innovating startups are too small and slow-innovating corporates too big. When startups grow they become like big corporates; their innovation slows down and their dynamic culture dilutes. Processes and compliance take over. Breaking things is replaced by ticking boxes. That’s why I think the problem with innovation is a problem of scale. And scale can only emerge by rethinking business organization. How can we scale organizations so they retain their startup agility and avoid the mass corporate extinction event? If you are a business leader transforming your organization should be your top agenda item. But transform how?
Let me suggest that in a digital economy, where people and things become increasingly interconnected, the innovative organization is made up of six fundamental pillars: right strategy, right culture, right work organization, right technology stacks, right data and right cybersecurity. Each of these pillars needs special, in-depth treatment. But for the purpose of this article I want to focus on two of the pillars – right technology stacks and right work organization – for they are the two that distinguish the innovative organization from its predecessors, and also instrumental to scaling innovation.
The first industrial revolution made humans into robots. Yes, you have read this sentence correctly. For the past two hundred years we humans adapted our work behaviour around machines. The very idea of a process comes from traditional assembly line and process manufacturing, where things need to happen in a sequence. Allowing for things to happen spontaneously and chaotically goes against the concept of “management”, which is at the heart of current business organization. Processes, managers, loops, repetition, rules, compliance, are the building blocks of traditional organizations. Workers going to work every day, staying at work for a specified period of time, vacationing only a few days per year, their output measured as if they were all the same, identical copies, robots. All these behaviours and methods have served us well for nearly two centuries, but now they are in dire need of reinvention.
In their forthcoming book “Surge: Navigating the digital tsunami” digital transformation experts Brad Murphy and Carol Mase propose a phased approach to making businesses fit for the digital era. Each phase liberates people from productivity-depressing processes and allows them to collectively engage in value-producing networks that innovate, not only around products and services but in everything that is required to make the business successful.
The nodes of these networks have access to technology stacks that reinvent the idea of corporate information technology. And here’s an important point: IT must cease to be a cost centre and instead become the means of innovation. To become so it requires the courageous embrace of the cloud. “Cloud-native organizations” accessing software micro-services in a cloud-based ecosystem environment means that teams can quickly build composable systems, experiment and fail fast, and thus significantly improve the delivery of the innovation cycle. More dramatically, this kind of radical transformation requires a major mindshift about what constitutes proprietary and what collaborative. Remember the discovery of the Santa Fe Scientists: productivity and innovation requires encounters and collaborations outside your organization. This means collaborating and co-innovating with non-employees, via talent platforms, but can also mean collaborating with competitors.
The final destination of this transformational journey is to destroy the current rigidity of organizations and replace it with a network of fluid and agile “micro-businesses” collaborating across, and beyond, the organization.
And here’s how the significance of Artificial Intelligence comes into play. For such micro-businesses to become effective you need technology stacks that allow for collaboration. More specifically you need AI to enable internal talent platforms that keep track of skills and match skills to tasks. You need AI to perform the routine cognitive tasks, and therefore augment the productivity of humans who will be performing the non-routine cognitive tasks (read “creativity” and “imagination”) as well as tasks that require human interaction (read “leadership”, “mentoring”, “communication”). You need AI to deliver interfaces that do not require humans to act like machines, but where the opposite happens: machines that communicate and interact with humans in a human-like way, for instance via voice and natural language, or sign language, or facial expression.
The rise of the humans
I would like to offer now a counterintuitive suggestion that goes against the consensus in the current debate over AI: that the fourth industrial revolution will free humans from their current enslavement by machines. Moreover, Artificial Intelligence will reinvent what a job really means, for workers as well as organizations. With my colleagues Ravin Jesuthasan and Tracey Malcolm we recently published an article in the Harvard Business Review where we looked how cognitive technologies will add value to what expert professionals currently do, by transforming their jobs to “pivotal”; in other words by making their jobs more valuable, not less.
But it is not just work augmentation that makes me an optimist. Artificial Intelligence is a technology that makes machines behave more like humans. This is the key idea, and perhaps the most significant aspect, of this revolutionary technology that has finally come of age because of machine learning algorithms, rich data sets and cheap parallel processing. However, we must not view human-like machine behaviour as a threat, but rather as an opportunity to completely reinvent our workplaces.
As AI gradually enters the physical world via sensors and the so-called Internet of things (IoT), we will experience the real impact of this technology on our world and our economies. Life in the late 21st century will be completely different from how we live today; and, in my opinion, will be better, more productive, more meaningful, less stressful, and more focused on human relations, friendships and family. This is why skills that focus on humans, such as psychology, human resources, sociology, social and health care, will become as valuable as designing building new technological systems and solutions. HR leaders will be key in delivering the transformation that their organizations need to be successful in the new era of the rise of the humans…