Business & finance professor, digital lawyer, restaurant owner, board member & traveler.
It was an interesting and exciting start of the academic year.
I gave my class on “Creative Thinking in a Digital Age” to a group of new students. I also spoke to a group of lawyers about the impact of technology on the legal industry and presented to IT auditors on “living with intelligent machines”.
The common thread linking these talks was the “exponential growth of new technology” and how it is changing the world.
It is always inspiring for me to share insights about the impact of disruptive innovation with a broader audience. I genuinely believe in teaching as an exercise in “co-creation”.
Last week, one issue became very clear to me:
When we talk about new technology, we all tend to focus on how it will change the world (in the future).
For instance, we try to predict the impact of artificial intelligence, robots and blockchain technology on our lives. But, in doing so, we often neglect how technology has already changed the world.
The “gap” between the “world as we know it” and the “digital world” is rapidly closing. All of us are — to some extent — “Digital Natives”.
We can no longer think and act using traditional models and concepts.
We can no longer rely on traditional authorities.
We should pay more attention to understanding how the future is already here. Yet, many of the changes that have already occurred are non-obvious and many people may not have even noticed them.
Let me explain.
Here are four “non-obvious” ways that digital technology has already changed the world.
More could be added, but these are the things that affect my work and life. All of them redefine and automate “trust”, “confidence”, and “quality”.
“Brands” have always been important in determining consumer choice.
The rationale is simple. Brands are essential in a highly competitive and visual led market place. The power of a brand is determined by two factors: how a product or service performs, but also what it stands for.
An established brand signals quality and superiority to consumers. Brands have authority and that authority motivates consumers. A brand creates trust and builds loyalty.
And yet, in recent years, the percentage of consumers that are attached to brands has declined significantly. This is a key finding of market research by “Digital Intelligence” firm L2 and has been discussed by its founder, Scott Galloway.
Today’s consumers are much less interested in brands and are looking at what a product or service can do for them, rather than signals of “trust” and “quality”.
The ingredients and benefits of a product are the new unique selling points. People seem to value convenience and choice more than brand names.
Why has this change occurred?
What creates trust in a product or service in a “post-brand” world?
How do we ensure that we are getting quality and superiority?
The short answer to all of these questions is “technology”. Software and algorithms to be more precise.
On Airbnb or Amazon, for example, we rely on the “wisdom of the crowd” — as established via an online platform and user reviews — to help us make our decisions. A combination of software rating algorithms and consumer reviews have become more important than brand loyalty in establishing trust and shaping our consumer choice.
We have “automated” trust, confidence and quality. New technologies, such as artificial intelligence, sensors and blockchain, will only further accelerate this automation process.
My grandparents worked at a large multinational company for their entire working lives. They trusted, relied on and were ultimately dependent on their “superiors”.
In one sense, there was no other choice. The “bosses” had the experience, knowledge and resources to act in the “best interests” of the company and its workers. Their acquired practical wisdom was crucial to the growth and success of the company. This is why companies were organized as static hierarchies. Such an organizational structure made sense in a world of information asymmetries and closed, stable markets.
Obviously, this has changed. New technologies and the open information culture that have been created means that everybody within an organization or business has become much “smarter”. It is no longer necessary to rely on seniority anymore when making decisions. In fact, it can even be (and is often) counter-productive.
Yet, many organizations are still organized as hierarchies.
In a business context, this creates problems. It is no surprise that such companies find it increasingly difficult to compete against more agile businesses that have fully embraced the “flatter” and more open logic of a digital world.
These newer companies have adopted a “best-idea-wins” culture that is structured around co-creation rather than seniority.
By creating teams where people with different backgrounds and expertise are working “cheek-by-jowl”, “out-of-the-box” solutions to business challenges are more easily identified.
And, there are many other examples. Consider the changed relationship between “employer-employee”, “teacher-student”, and “doctor-patient”. All of these relationships have already become less hierarchical in a digital world.
In order to build trust, organizations — again, think business, government, education, etc. — have often relied on compliance with “best practice” as a way to build trust and improve confidence.
After all, all organizations are exposed to the risk of inefficiencies, mistakes or — in a worst case — corruption and fraud. Compliance with “ready-made” solutions that a community of experts have certified as “best” seems a sensible way to mitigate these risks.
And, of course, such “off-the-shelf” solutions were never set in stone. It has always been widely acknowledged that a “one-size-fits-all” approach rarely works and that some deviation from “best practice” is both possible and prudent.
Nevertheless, in the past, most organizations tended to take a conservative approach to “best practice”, strictly complying with the recommended principles, practices and procedures. Trust, confidence and belief in quality were ensured by the “authority” of the institutions that had identified “best practice”.
As a result, over time, such recommendations have become more and more “sophisticated”. Recent financial crises and other economic shocks have only added to the complexity.
However, in a digital age, everything (products, services, business models, markets etc.) are constantly being disrupted as a result of technological change.
The “best practice” of yesterday may not work tomorrow, or even today.
In a fast-changing environment, “best practice” can no longer be captured by static solutions derived from some “all-knowing” authorities. We live in a world where complying with “best practice” from the past is no guarantee of future success.
Again, new technology is both a cause of this change and the source of a solution. For instance, social media and other technologies make it possible to replace ready-made “best practice” with individualized and personalized stories about an organization and its values and goals.
I’m convinced that a “personalized” narrative and connecting that story with other available information (financial, non-financial) generates more trust and confidence than “checking some boxes” and providing “boilerplate” information.
In a world where information and data were not widely available, scientific studies were necessary to provide knowledge about complex issues to the wider world.
Ordinary people, as well as organizations, had to rely on these studies to make sense of the world and make well-considered decisions. Scientific studies offered objective truth and an indisputable perspective. The production of such knowledge was how I saw my role as a professor.
Science enjoyed a monopoly as a source of authoritative knowledge.
And yet, a paradox of scientific and technological development is that it does not provide greater certainty, but merely seems to create a heightened sense of uncertainty and insecurity. The digital world is a world of risk — of scientifically identifiable and measurable danger — but, more significantly, it is also a world of uncertainty, a world where we know there are many things that we don’t know.
Again though, technology plays a crucial role in providing alternative solutions.
Social media and communication technology have made it easy to share our experiences, feelings and ideas. We are generally more interested in the “direct” testimonies, experiences and advice of different stakeholders themselves than in the objective and general conclusions of a report.
We trust and rely more and more on publishing and sharing platforms where it is possible to have an intelligent debate and discussion with an interested and knowledgeable audience.
These testimonials and stories (and, again, this relates to the wisdom of the crowd) often provide a clearer and more trustworthy view than an impersonal, objectivized and generalized data analysis. Personal stories are superior in helping make choices (in life and work).
In a digital age, trust and quality are no longer guaranteed by “old world” concepts, such as brands, best practice, hierarchy and even, to some degree, science.
Technology has made everyone smarter. It has made access to first-hand testimony much easier, allowing us to rely on the “wisdom of the crowd” to tap into the knowledge, experience and expertise of other people.
The impact has been significant and it affects every aspect of how we live and work.
In our discussions, we focus a lot on new technologies, such as AI, robotics, sensors, blockchain technology and the Internet of Things. The impact of these technologies will be significant. There can be no doubt about that.
And yet, we must realize that the transition to a flatter world with less intermediaries, hierarchy and authority has already occurred. The future is here now and mapping the contours of this new world is vital.
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