Six Trends I Think I See

Six Trends I See

Lyn TurknettBy Lyn Turknett

TLG Co-founder and Co-chair

I read an article just last week that recommends never saying “I think” – or multiple other phrases that show any form of uncertainty because you won’t sound confident.  I’ve decided that confidence isn’t what the world needs right now.  For 2021, I am embracing uncertainty and moving ahead anyway.  And I actually think Covid has taught us to do that, or at least to practice that, and one big danger is that we’ll go back to our old, “all the ducks in a row” past.

Trend One: Organizations will move faster because they’ve proved they can.

The speed with which I saw organizations shift and change has been incredible. Just the speed of the move to remote work was incredible. Organizations that had previously dithered about the security risks of remote access had the technology up and running in days.  Massive pivots – in the way service was delivered, in what was manufactured, in the focus of research – pivots that would have taken years in the past – were accomplished in weeks.

Humans may not always like change, but they are truly change masters. There’s a great quote from a leader in a McKinsey report on lessons from the pandemic: “How can we ever tell ourselves again that we can’t be faster? We have proved that we can. We’re not going back.”

Trend Two: Organizations will move faster and make better decisions because they’ve changed where decisions are made, and because they’ve begun to use iterative, agile processes broadly.

“Organizations have removed boundaries and have broken down silos in ways no one thought was possible. They have streamlined decisions and processes, empowered frontline leaders, and suspended slow-moving hierarchies and bureaucracies.“ From Ready, Set, Go: Reinventing the organization for speed in the post-Covid-19 era

Organizations will be pushing decisions to the edges – where people who are close to the customer can make them.  Amazon has always moved fast. Jeff Bezos says that “Day One” companies – companies that keep a start-up, beginner’s mindset – make good decisions quickly.  Bezos says that most decisions are reversible, “swinging door” decisions. Those can be made quickly at the level where work is done, and don’t need multiple approvals.  For more significant decisions, make them with 80% of the information – and then monitor.

Iterative, agile processes are no longer the sole province of software developers; they are infusing speed, high-quality input, customer focus, and experimentation into many business processes.  In the summer of 2020, I served on a panel with Carolyn Homberger, Chief Risk Officer of ACI Worldwide just as they were opening up operations in China. She talked about using agile teams and design thinking as they did so – and leaving most of the decision making to the teams. She said that they will never again use top-down methods.

Trend Three: Organizations will use more AI.

Data is plentiful, our machines are vastly more powerful, and feedback loops are faster, vastly increasing predictive power.  In How to Win with Machine Learning, authors explain how early movers and late entrants can use data and machine learning for competitive advantage. AI gets better and better, and professions like accounting law, medicine, and finance are all in the cross hairs.

This article by Thomas Davenport and Rajeev Ronanki is three years old now, but still provides an easy-to-understand framework for how we are using AI (cognitive technologies) in business, and where it’s likely to grow.  The authors interviewed 250 executives and studied 152 projects, and describe three types of uses: The first is Process Automation, and nearly half the projects fell into this category – usually automating administrative or financial back office tasks like updating customer records across systems or replacing credit cards.
The second is Cognitive Insight – using algorithms to detect patterns and learn to make predictions. Examples include identifying credit card fraud in real time and the annoying “here’s an ad that might interest you.”
The third is Cognitive Engagement, “conversing” with a customer using chatbots and intelligence agents. Examples include lower level tech support in natural language and using chatbots to answer employee benefit questions. We are also beginning to see such technology in coaching and mental health applications.

I can no longer find the article, but I read this phrase somewhere recently: “ When machines have enough data to make very accurate predictions, humans can get out of the way and let the machines run the show.”  I think that’s profoundly dangerous (in our field, AI can help eliminate bias in hiring but can also exacerbate it), which leads to the fourth trend.

Trend Four: Organizations will recognize the exceptional power of the human brain.

I think, and profoundly hope, that we are also at a time of recognizing what AI still cannot do, and will not do for many,  many years.  Revenue management guru Robert (Bob) Cross posted an article near the beginning of our pandemic year entitled Rise of the Humans, exposing the profound AI “intelligence gap” that helped create many of the shortages we saw.  The software that had been deftly predicting, with every increasing accuracy, demand for all manner of goods and services, could not see coming what almost any human could have easily predicted – gloves, masks, and toilet paper would be in high demand. Hotels in Denver? Not so much.

Bob does an excellent job of explaining the power of the human brain: The human brain is an amazing organic computer. According to some estimates, our minds can store up to 2.5 petabytes—about the same as all of Yahoo’s computers combined. The clock-speed of the neurons in our brain, at only one kilohertz, is substantially slower than the one gigahertz processor in our cell phones. However, our brains have 86 billion interconnected neurons. A neural network computer with that many connections could conceivably be built in a few decades, but it would require a gigawatt of power—about the amount of energy consumed by Washington, DC.

Josh Turknett, a neurologist, thinks that our understanding of the human brain is flawed, in large measure because we have conscious access to so little of what we actually do.  He has a statement that I love: “The most sophisticated cognitive networks that humans possess – the ones capable of genius level insight – are part of the ordinary cognitive machinery of all human beings.“

Josh believes that as humans we tend to stratify ourselves by the things that are hard for humans (memorizing digits, computation in our heads, remembering trivia) but ignore the power of the “ordinary” human brain. In a recent podcast, entitled Tautology, he posits that we consider intelligence what we measure using an “intelligence test,” an equivalence that severely constrains our understanding of human capacity.

In the 1980s, Bob Turknett and I did disability testing for the Social Security Administration, and much of that involved assessing cognitive ability after some sort of accident. I so clearly remember one young man whose frontal lobes had been smashed when he hit a concrete dam after a zip line broke, but on the Wechsler Adult Intelligence Scale, the test that  “assessed intelligence,“ he scored a 132 – well into the genius zone. His ability to understand verbal analogies, define words, remember digits, put pictures in order to create a story, and replicate visual patterns was off the charts. But he could not hold a job. His judgment was like that of a child, and he couldn’t live alone or organize his life.

The things he could still do may well be the things that machines will learn to do even more brilliantly. But judgment, creativity, and empathy – those are human strengths that we are decades away from replicating. Great organizations will get better at integration of humans and machines. And get better at recognizing and using humans and machines, which leads to the next trend.

Trend Five: Structure and Design of Organizations will Change.

I’ve long believed that the typical design of organizations constrains change, constrains speed, and lets most human brains lie fallow. I’ve written before about how excited I was in 2018 to see Gary Hamel’s The End of Bureaucracy in HBR. The article highlighted Haier, a company that is structured so that employees are (1) close to the customer and (2) making decisions themselves and making decisions quickly. Haier also is a massive and effective user of AI.

I’m sure there are implications of what’s happening now that I can’t begin to imagine, but it does seem that leveraging the power of humans AND the power of machines means that traditional, siloed organizations are going to increasingly create disadvantage. This paragraph from Competing in the Age of AI struck me:

Silos, however, are the enemy of AI-powered growth. Indeed, businesses like Google Ads and Ant Financial’s MyBank deliberately forgo them and are designed to leverage an integrated core of data and a unified, consistent code base. When each silo in a firm has its own data and code, internal development is fragmented, and it’s nearly impossible to build connections across the silos or with external business networks or ecosystems. It’s also nearly impossible to develop a 360-degree understanding of the customer that both serves and draws from every department and function. So when firms set up a new digital core, they should avoid creating deep organizational divisions within it.

I believe that agile works and lean processes work because people’s brains are used. Which brings us to trend six – Leadership will Change.

Trend Six: Leadership will Change.

I remember a story I heard from a leader in an organization that had just implemented Lean. She was visiting a plant, and saw a mirror in an odd place, and she asked about it. Employees explained that the mirror allowed them to see the other side of something they were working on, and saved a lot of time since they didn’t have to walk around to see. She asked when they thought of that simple fix. “Oh, we thought of that years ago. But nobody ever asked us about it.”

Humility, and the ability to listen and serve, will be needed in the future. We are in a condition requiring permanent adaptability. Leaders of character have to balance the courage to lead with the humility to listen and learn – constantly.

Lyn

LTurknett@turknett.com
Phone 770-270-1723
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