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Also posted on: The Norfolk Punt
I was thinking about the real drivers for the Mutable Enterprise recently and I think they are a bit more complicated than just the appearance of younger customers with mobile phones. In my opinion, we are all on a journey past an inflection point (the “knee” in an exponential curve) in the way society and business interoperate and only the Mutable Enterprise will have the ability and flexibility to cope with the rapids on the way.
Put simply, developments in automation and AI (artificial intelligence) will soon mean that goods can be produced by a few very skilled programmers (or, better, orchestrators) of advanced, autonomic (self-correcting), intelligent services, delivered by robots. Leaving aside some actively dystopian possibilities, the vast majority of middle managers will be out of a job, but with an “obligation” to buy the goods the robots produce and keep the whole thing going – which is probably why there is an interest in the Universal Wage concept and so on.
These new customers are likely to be highly educated and very fickle, so such enterprises that survive will have to change constantly, in order to compete with “disruptive innovators”. It is very hard to predict and manage through an inflection point, so the established business status quos will likely stop working as a model for the successful business.
One of the early adopters of the Mutable Enterprise concept at Bloor was Martin Banks, who has been observing and commentating on the electronics and IT industries since 1968, so I thought I’d ask him what he thought of this scenario.
Me: Martin, what do you think of the idea that we are approaching an inflection point in business and society?
Martin: I agree with the inflection point suggestion. I think that AI will (after many false starts) start to take off, and with the “collaborability” of mobile, cloud, IoT and business apps, it now has the underpinning capability to automate many jobs out of existence – and they will be middle manager jobs. That will crucify current governments, for their core demographic will be roundly shafted. What is worse, our current rulers will not have the mindset to cope with the fundamental contradictions that will follow. People with no jobs will not have the money to buy the products the automated factories will produce. So the economy will tank – without radical change.
Me: I suspect we are both “cynically optimistic utopians”, so how do you think we’ll survive this?
Martin: I suspect that change will have to include some radical changes in social policies. One option may be to tax industry heavily so that much greater benefits are paid in order to provide disposable income. Another is a structured environment of “non-jobs” that would provide a reason to pay the deserving unemployed “salaries”.
Me: Yes, perhaps these sources of income could include beautifying the environment (compare F. D. Roosevelt’s New Deal in the 1930s); or even the “Universal Wage” being trialled in Finland and other places.
OK then, so how do you see this tying into the “Mutable Enterprise” concept?
Martin: Every form of business is looking to exploit automation wherever it can, as soon as the technology is available and the managers can get their collective heads around the possibilities. The mantra, as usual, is to increase productivity. And one of the favourite ways of doing that, of course, is by using technology to rationalise jobs out of existence.
As more products and services themselves are digitalised, along with the underpinning management services of those products that can’t be digitalised themselves, more and more jobs will continue to disappear. In addition, more of the non-digitalisable products are being at least surrounded by digitalisation.
To get the levels of productivity business – and indeed Mammon itself – needs to keep the wheels turning will require automation: lots and lots of it. Humans may be brilliant at thinking ‘outside of the box’, a trick that computing may never manage to emulate properly without someone coming up with a code equivalent of “strange smoking substances”, but once inside the box they are slow, and tend to get slower as boredom sets in. The other aspect of this is that humans are actually quite indecisive. The speed at which decisions are likely to be needed will increase, yet the natural tendency of humans is to question and debate any questions or their answers. Committees get formed to examine them, followed by reports and even Boards of Inquiry. I even know individuals whose reactions to an issue are similar to a whole internal committee having an argument.
Yet “real time” is going to mean a decision being made and executed in seconds – even milliseconds. Increasingly that is where the business advantage will come. Which is why I like your suggestion of the fickle customer, for the implications of this are significant. Get the decision wrong and it can be a customer lost – and the core objective is to grow sticky customers that can even become fans of a brand.
But get it right, so you are able to meet – or even predict – a customer’s fickleness, and you can have that customer for life. And with automated manufacturing and the right tools, such as 3D printing, it could be possible to build custom versions of products on demand. This has been talked about for some time with clothing but it could now be applied to a far wider range of products.
Me: Hearing that, I start to think about the governance problems of a business in a constant state of change. Many existing “good practices” simply won’t work anymore; but I don’t see a fickle, digitally-aware, communicating customer community putting up with poor governance or sharp practice for long – it’s a TRUST thing. How do you see the Mutable Business engaging the TRUST of all of its stakeholders?
Martin: TRUST is an integral element in creating sticky customers, and automation will make it possible to deliver trustable capabilities in many ways. Take cars, for example, which can now not only monitor every aspect of their performance, but also “phone home” to schedule service appointments and order replacement components (where “component” probably equals a large sub-system that was assembled by robots and can be extracted from, and replaced in, the vehicle by other robots).
Automation, particularly in the form of the Industrial Internet (aka Internet of Things) is an inevitable development. For many industrial processes, ever-increasing levels of automation will be the only option available. Even if one industry tried to use more people to run processes as fast or efficiently as an automated alternative, the former would never be able to beat the latter, if only because of that need to form management committees to oversee things.
The same holds true for cloud-based systems. To get the level of operational efficiency, flexibility and end-user agility, increasing levels of automation and self-managed systems will be required to manage and run the Software-Defined-Everything infrastructures and environments that will be required to fulfil the needs of business, Mammon and consumers.
Me: Hmmm, can you provide a brief sketch of what a Mutable Enterprise might actually look like?
Martin: In two words, I would probably say “multi-faceted”, but to be honest even I am not sure of how this might end up in practice and over time. But I think signs of it can be seen in the cloud services industry. Here, the big gorillas – Amazon AWS and Microsoft Azure, for example – are not end-user facing (by which I mean those businesses whose primary business is other than IT). They are service providers to other businesses. Others, such as the Facilities Management services company Digital Realty, are service providers to major service providers, such as IBM SmartCloud.
Their customers, for now at least, are mainly enterprises servicing the needs of their customers. But what I do see happening is that this process is becoming increasingly granular. Major service providers are already servicing the needs of smaller service providers such as applications vendors and SaaS providers. And as it grows the services available become more specialised.
This fundamental model can be applied across many digitalised industries where customers can then interface with processes needed to fulfil their needs at whatever point is convenient for them or at the point they feel they can trust to deliver. So that might be a small design house that then works with a chain of other companies that provide everything from technical consultancy through to manufacturing, or a major manufacturing business that brings in the other players as required.
And going back to that fickle customer, this will probably be the type of model that would be able to meet those personalised requirements they would be seeking. In many ways, it could be said that this is not too different from the way much of business works already. But with increasing digitalisation the interactions will be faster and much richer.
Me: Thanks, Martin. To summarise, then, I think the “Mutable Enterprise” issue is a bit bigger than many people think. It’s not simply a question of adopting new technology and Agile techniques such as DevOps. The Mutable Enterprise has to navigate a journey past an inflection point in the way that business and society operates – Martin expands on this here.
This is why it is important why all stakeholders in the Mutable Enterprise are involved (where appropriate, you don’t want business managers micromanaging technologists) in designing and building Mutable services, including customers – not just business managers and certainly not just technologists.