Where do we go tomorrow?
Peter de Jager is a provocative Speaker, Writer and Consultant. His primary focus in on how we manage change, technology and the future.
In addition to speaking at conferences worldwide, he also writes monthly columns for CIO Magazine and Computerworld Canada.
His goal is always to question what we think is so, and in so doing perhaps open up new opportunities.
If you'd like permission to reprint any of Peter's articles, please contact him directly.
You can contact him at
pdejager@technobility.com
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A discussion about predicting the future is like a descent into the Black Arts, but every organization, especially those diligent enough to actually attempt to create strategic plans, must look to the future if they expect to survive long enough to arrive there.
Unfortunately, our perception of what the Future might bring, is far from perfect and filled with flaws repeated time and time again. When we predict the future of certain types of products, it is as if we refuse to learn from our past mistakes.
We all know the following to be true:
At the beginning of the life cycle of any product, the associated production, distribution
and marketing costs keep the product out of the reach of the vast majority of potential
consumers. This is always a temporary situation. As production costs decrease, as we
refine and perfect the new technology, consumer access to and uses for, the product
inevitably increases.
Of course these observations are true. How could they not be? It does not take a PhD in mass marketing or mass production to know that the first items off the assembly line will cost more to produce, market and sell than the 1,000,000th item.
Yet there is a good reason to restate the blatantly obvious, it forces us to ask,
"Why do we continue to make statements about the Future that contradict the obvious?"
What is it about our view of the Future than generates these statements from leaders who, at the time they uttered these words, were considered expert in their various fields?
"You could put in this room... all the radiotelephone apparatus that the country
will ever need",
Stated by W. W. Dean, President of Dean Telephone Company in 1907.
"I think there is a world market for about five computers"
Attributed to Thomas Watson in 1943, then Chairman of the board of
International Business Machines (now IBM).
"640k ought to be enough for anybody"
Attributed to Bill Gates in 1981.
This handful of quotes is a perfect example, symptom if you prefer, of a fundamental flaw in how we think about the future. Despite our painful awareness of the rapid pace of change, when we look to the future we imagine it's going to be pretty much identical to the way it is now.
In each of the quotes, the speaker is following a peculiar chain of logic. They seem to believe that the constraints which exist today in these products, or the manner in which we currently use them, will never change. Therefore, at no time in the future, will consumer behavior ever change, despite the contradictory evidence in front of them… the technology these experts are discussing, is itself, representative of a significant change in yesterday's constraints.
More peculiar, is that the speakers are all individuals who, by their personal effort, have brought about significant change. Through their own actions they are personally responsible for invalidating similar statements made in the past!
We all find such quotes so perversely amusing, that we repeat them time and time again in conversation, yet we fail to learn from the very lessons
we laugh at. I'm sure Bill Gates was aware of, and at some point in time even chuckled over, the Thomas Watson quote… how could he not? His impressive success at propagating his operating system to every desktop computer in the world was only possible because Thomas Watson's quote was so fundamentally wrong! There are far more than five computers in the world.
In spite of this, Bill Gates appeared to honestly believe that human ingenuity would happily constrain itself to work within the confines of 640k. Likewise, Thomas Watson appeared to believe that human ingenuity could not find widespread use for computers.
Is it so unreasonable, especially when we consider the source of the quotes, to expect that the speakers would have a better grasp of what the future might bring? Sadly, for all of us, we're all guilty at times of the same fuzzy thinking with respect to the future.
Perhaps it's because we tend to think mostly about the past, seldom about the present and rarely past dinner? Whatever the reason, we're not very good at looking forward and when the world is changing as fast as it is, the ability to cope with rapid change is rapidly becoming an important survival skill.
Can we formulate a series of rules about how we progress to the Future, so that even if they do not enable us to make perfect predictions, at least they prevent us from lines of thinking which ultimately prove to be embarrassingly silly and naïve?
There is some evidence to support the notion that we can, and are learning to understand the future a bit better. Thanks to Gordon Moore, co-founder of Intel, very few computer experts would disagree with the prediction that tomorrow's will be significantly more powerful than those available today.
In 1965, Moore observed that the number of transistors per square inch on integrated circuits had doubled every year since they were invented. He suggested this trend would continue for the foreseeable future. Nearly 40 years later his observation has changed very little and is now known as Moore's Law. It is usually simply phrased as follows.
"Computing power doubles every 18 months".
This 'law' has become an integral part of our thought process when thinking about the future of computers. So much so, that people hold off from buying a computer today, because they know it'll be 'obsolete' within 6-12 months. Naturally there's a flaw to this type of thinking. We mention it only to demonstrate the widespread impact a simple idea can have on consumer buying patterns.
Hidden inside Moore's law is a very basic concept;
The advance of Technology collapses the constraints
which define how we do business, and directly affects
what is impossible today and possible tomorrow.
When Thomas Watson stated there would only be a market for about five computers he was making several inter-twingled assumptions; He was assuming that the existing constraints of cost, size, computing power, reliability, complexity of use and operating costs would remain the same.
These assumptions combined to create the belief that the public could not justify and therefore would have no need of a product operating under these constraints. BUT… as we have seen time and time again… remove the constraints and a market will make itself known. Both Dean and Gates made the same sort of assumptions.
Technology advances according to these mini-laws; Costs always decrease; size changes in the direction we want it to go; speed is a goal we strive for and achieve within the limits of diminishing returns; quality always goes up; ease of use increases and operating costs
go down… these mini-laws are true for ALL emerging technologies. Any examination of the future which chooses to ignore these 'Laws of Technological Maturation' will prove inaccurate with the passage of time.
It is difficult to see how much we are affected by the collapse of constraints, because the familiar becomes invisible. Look at the rise of the household refrigerator. How many of us are conscious of what this pervasive household appliance means to our comfort, health and way of living? Without some sense of how significant a collapse of a constraint might be, it becomes almost impossible to tune our mental radar to imminent 'collapsing constraints' and take advantage of them.
As an exercise in the possible impact of a collapsed constraint, give a thought to the following idea for a new business called "Jazmine".
For the purpose of this exercise assume that the year is 1990 give or take a year or two. The Internet is only just beginning to become a publicly accessible service. PCs are very common, but certainly not as capable, powerful or as inexpensive as they are today (2004).
As a budding entrepreneur you've noticed that teenager's interest in music is as strong as ever, but that it is very expensive to buy all the music they're interested in. All thoughts about copyright issues are pushed to the side and you decide to create a central service to assist teenagers to make and share copies of their favorite music.
You will create a marketing department to communicate what Jazmine has to offer to your market. Teenagers from around the world will then compile a list of the music they own and are willing to share with other subscribers to Jazmine. They'll mail this list of music to you and you'll enter it into a central computer system. This central database will keep track of what music is available, and who exactly is willing to share it.
A subscriber interested in acquiring all the published works of the Beatles would mail you their request list. Upon receipt of this request list, your capable staff will enter the request and mail back to the requestor a list of addresses of all people willing to share that particular set of music.
When the subscriber receives that list of addresses they will then mail a request to the willing contributor to your collection. When they receive that request, they will copy the requested tracks onto a tape and then mail that back to you.
Summarizing what exactly is involved in order to receive a copy of "Yellow Submarine" by the Beatles.
a) Mail your request to the central site - 2-3 days
b) Request received and entered into system - 1 day
c) List of addresses mailed back to you - 2-3 days
d) Upon receipt of this list you mail out a request for a copy - 2-3 days
e) Person with a copy of the "Yellow Submarine" receives your request
and makes a copy for you - 1 day
f) This kind person then mails the copy to you - 2-3 days
Total transaction time, from time of initial request to receipt of the bootlegged audio tape? An unreasonable, extremely optimistic 10-14 days.
There are obviously a large number of issues we've chosen to completely ignore when designing and describing this business;
a) The cost of providing the central computer.
b) The time and cost involved in entering in all the available music.
c) Keeping the database 100% accurate, otherwise the number of requests that go
unfulfilled will kill this brilliant idea.
d) How do you communicate this service to a large enough population to make it worthwhile?
e) What do you charge each subscriber for using the service?
f) How do you ensure the quality of the recordings?
g) How is the effort involved in making the copies managed so that some subscribers
are not overloaded with requests?
h) … the list goes on and on.
It does not take a tremendous amount of business acumen to come to the inescapable conclusion that this business idea has no reasonable chance of success. Basically the delays between one process and another are too cumbersome. Leaving aside the financial model, there is a inherent flaw in the concept. While many people might possibly be willing to go through the effort required to receive copies of their favorite music, few would be willing to invest the time and expense so they could make copies for others.
What if you could collapse the constraints of time and cost?
If you did it would be called Napster. And... within a decade you could threaten the very existence of the Muli-Billion dollar music
industry.
The lesson here is to recognize there is no fundamental difference between Jazmine and Napster - except the absence of some constraints.
Our challenge is to examine existing business processes and by applying similar technology achieve similar reductions of 99.97% in cost, effort and communication cycles. Not possible? You are contradicted by
the success of Napster.
The function of technology in society is to enable individuals to do more. A pulley system enables me to lift far more than I could lift manually; my eye glasses enable me to see better;
binoculars enable me to see further… Napster combined three different technologies together; The Internet (the distribution process), Digital Music (the Product), and Personal Computers (the management/control function) and challenged an entire industry.
The question every producer of any type of product or service must continually ask themselves is… despite the fact that I am under no threat today, would it be possible, a decade from now for an individual to accomplish what today requires my entire organization?
Or could I create that elusive strategic advantage, by doing nothing more than collapsing constraints held up more by ignorance of what is possible than by intent?
© 2005, Peter de Jager –
Peter is passionate about change, how it affects both individuals and
organizations and allows them to grow and prosper. To contact him, and
host internal seminars on Change Management visit www.technobility.com
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