Corona Virus Accelerates Digital Transformation

Knowledge has three eyes: memory when it looks at the past, wisdom when it looks at the present and responsibility when it deals with the future.” – 1642, Michael Wexonius

In March of 2016, I had the pleasure of sharing a lunch with several Illinois Tech Institute of Design (ID) professors and the Chairman of the ID Board of Overseers Rob Pew.  We chatted about the future of the Institute of Design.  I had just received a planning document from ID sharing their excitement about building a new facility on campus for the school.  I decided to shift the conversation to the future and challenge both the ID team and Rob with his career at Steelcase on why they were continuing to spend money on physical buildings.

I asked very directly why they weren’t planning for a future of Virtual Reality and Augmented Reality where physical presence in a specific place at a specific time is no longer required.  I shared my experiences recently with several Seattle VR enterprise application startups and that I thought within a few years the hardware and software would be good enough to go well beyond what is possible today by requiring physical presence.  I asked Rob how Steelcase was going to survive in 5-10 years when there was no longer a need for office buildings.

I identified several implications of not having to travel to a physical place to go to school or go to work.  We would no longer have to invest enormous sums in physical buildings nor would we pollute the atmosphere by daily commuting or air travel for meetings.  We would help the environment and I argued that we would actually do better work and collaboration with the new technologies.

Needless to say I was laughed at and no minds were changed.

I wrote up the components of this conversation in “From Pages to Places: The Transformation of Presence.”

I had a glimpse of the future but I thought the impetus would be the technology evolution of VR/AR/MR hardware and software.

Spectrum of Virtual Reality

It never occurred to me that the Covid-19 pandemic would be a forcing function and impetus to a large scale change in school and work.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” – Bill Gates, 1996.

While none of us were ready for the suddenness of having to shift to working and learning from home, we are able to limp along due to a wide variety of advancements:

  • Videoconferencing with tools like Skype and Zoom to enable remote collaboration for work and learning and social connection for family and friends
  • eCommerce ability to order the necessities of life from the local grocery store to Amazon and Walmart have become the new retail infrastructure:

“Amazon has ‘essentially become infrastructure,’ says Sally Hubbard, a director at the Open Markets Institute and a former assistant attorney general in New York’s antitrust bureau. As the country stays home and observes social distancing guidelines, its reliance on Amazon is becoming increasingly apparent.”

vSpatial Collaboration Software

While the Covid-19 pandemic is up close and in our faces every minute of every day threatening death, we are also in the midst of a slower moving threat to humanity with the climate change crisis and global warming.  Organizations like Citizen’s Climate Lobby are working to both raise awareness and urgency about climate change, and also to do something in the short term as a bipartisan way to make progress.  Our advocacy and support of the Energy Innovation and Carbon Dividend Act is an important first step.

One of the interesting consequences of shutting down much of the world is the positive effect on causes of climate change like pollution.  We are essentially running short term experiments on human effects on the climate.

Climate Change Changes

The Covid-19 emergency is horrid in its human toll and the economic implications.  In spite of warnings for decades, the current US administration was woefully unprepared for the pandemic.  It is not an intervention that anyone would have chosen.  But it is here.

I am in my 31st day of self-quarantine and social distancing.  It’s been difficult not to play with and hug our grandchildren.  It is painful to observe the stress and strain of our children having to care for our grandchildren AND try to work full time remotely AND try to care for themselves.

Yet, the emergency is here and we are dealing with it thanks to many developments by many companies on their own path to digital transformation.

“Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.”

Most corporations have missed that the biggest issue for digital transformation is the behavior change required by their employees AND their customers.  The challenges of digital transformation are captured in “Digital Transformation is not About Technology.”

“Of the $1.3 trillion that was spent on DT last year, it was estimated that $900 billion went to waste. Why do some DT efforts succeed and others fail?

“Fundamentally, it’s because most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, DT will simply magnify those flaws. Five key lessons have helped us lead our organizations through digital transformations that succeeded.

Lesson 1: Figure out your business strategy before you invest in anything.

Lesson 2: Leverage insiders. 

Lesson 3: Design customer experience from the outside in.

Lesson 4: Recognize employees’ fear of being replaced. 

Lesson 5: Bring Silicon Valley start-up culture inside.”

As I experience social distancing, I reflect back to the “From Pages to Places: The Transformation of Presence.”  There are two key changes here:

  • the Internet is going to transform from a system of pages to a system of places.
    • In a very simple form that is like Zoom Rooms or Google Meet.
    • In a more complex version it is the world envisioned in Ready Player One of a wide range of actual places (captured through 360 degree video) and animated places created artificially.
  • we are going to change our concept of presence from being physically present to being virtually present.
    • TAI with their “Power and Presence” communications workshop offers a wide range of coaching and practice for how to communicate with presence whether in person or virtually.

Yet, not all of the economy is made up of knowledge workers.  We have manufacturing and agriculture and the services sectors which today all require physical presence.  However,  we can see trends over time to go from very large scale to the very small.  Chris Anderson in Makers: The New Industrial Revolution shares how manufacturing can go the way of computing:

“In short, the dawn of the Information Age, starting around 1950 and going through the personal computer in the late 1970s and early 1980s and then the Internet and the Web in the 1990s, was certainly a revolution. But it was not an industrial revolution until it had a similar democratizing and amplifying effect on manufacturing, something that’s only happening now. Thus, the Third Industrial Revolution is best seen as the combination of digital manufacturing and personal manufacturing: the industrialization of the Maker Movement.

“The digital transformation of making stuff is doing more than simply making existing manufacturing more efficient. It’s also extending manufacturing to a hugely expanded population of producers— the existing manufacturers plus a lot of regular folk who are becoming entrepreneurs.”

Anderson, Chris. Makers: The New Industrial Revolution (p. 41). Random House, Inc.. Kindle Edition.

I’ve participated in two of these down sizing revolutions in computing (from mainframes to minicomputers to PC software development) and in printing (from very large printing machines to desktop publishing).  As 3D printers become smaller and less expensive and utilize different materials (from plastics to metals), we can see an evolution from mass production to mass personalization as we each can produce what we need.

We see shifts occurring in agriculture from massive farms to more localized farms as recommended in Paul Hawken’s Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming.  I see this everyday on my social distancing walks as I go by HeyDay Farm and restaurant on Bainbridge Island.

“You begin to see that growing even a little of your own food is, as Wendell Berry pointed out thirty years ago, one of those solutions that, instead of begetting a new set of problems—the way “solutions” like ethanol or nuclear power inevitably do—actually beget other solutions, and not only of the kind that save carbon. Still more valuable are the habits of mind that growing a little of your own food can yield. You quickly learn that you need not be dependent on specialists to provide for yourself—that your body is still good for something and may actually be enlisted in its own support. If the experts are right, if both oil and time are running out, these are skills and habits of mind we’re all very soon going to need.”

Hawken, Paul. Drawdown (p. 53). Penguin Publishing Group. Kindle Edition.

While life is bleak today and the daily counts of deaths in the US and around the globe due to Covid-19 are depressing, I am excited about the innovation that will occur.  I am especially excited about each of us being able to participate in that innovation as we now have visceral experience in the challenges of remote working and learning and innovation.  Hamza Mudassir shares in “Covid-19 Will Fuel the Next Wave of Innovation” his thoughts on what will happen next:

“Pandemics have a direct impact on biological, psychological and economic dimensions. Its intensity varies depending on the mortality and morbidity rate of the pathogen at hand, as well as the time it takes for it to spread.

“For Covid-19, the biological impact has been quick to escalate and has been the hardest-hitting for the elderly. The psychological impact can be observed in stock markets across the world – investors are underconfident about the future as the information on the spread of Covid-19 and its impact on global productivity is at best incomplete and at worse, incorrect. The global population is also facing psychological impact, with low morale and increased isolation as human contact and freedom to travel are getting heavily curtailed. Last, but definitely not the least, the economic impact has been significant. In the short term, the supply of various essential products has been disrupted and the demand for various products and services have dropped off. If this continues, Covid-19 could very well affect global GDP negatively.

“Longer-term innovation and changes in trends will come about as consumers and businesses try earnestly to normalize the impact on psychological and economic dimensions — provided containment is reached and the biological impact is resolved. Studying over 50 startups that gained scale around the times of global crises via the lens of this framework clears the mist. To start off, a recession usually brings about an acceleration in business model change, driving down costs to serve and prices. On the other hand, pandemics tend to enable entirely new categories of businesses. It also becomes quite clear that both pandemics and recessions are accelerants to innovation versus being direct causes of it i.e. these startups and business ideas were around but gained popularity at a faster rate thanks to a certain black swan event. With these learnings and frameworks in mind, below are three macro innovations we can expect to stick around post-Covid-19. “

What is clear to me is that we cannot rely on government and businesses for our future.  We each need to participate in the next wave of innovation both for future pandemics AND to combat global climate change.

Digital Transformation Laggards

We need our collective wisdom and three eyes to share the responsibility for our collective future.

This entry was posted in Citizen, Outcome, Reflecting, Wake Up!. Bookmark the permalink.

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