Disruption is accelerating. Will you be a disruptor or be disrupted?

I’m reading a great book right now, it’s called Machine, Platform, Crowd: Harnessing Our Digital Future, by Andrew McAfee and Erik Brynjolfsson. It offers an interesting perspective on how we should look at the future of business from a digital perspective.

This is how the authors describe the book:  

“We live in strange times. A machine plays the strategy game Go better than any human; upstarts like Apple and Google destroy industry stalwarts such as Nokia; ideas from the crowd are repeatedly more innovative than corporate research labs. We must rethink the integration of minds and machines, of products and platforms, and of the core and the crowd. In all three cases, the balance now favors the second element of the pair, with massive implications for how we run our companies and live our lives.”

The authors compare the three looming technological shifts to the the turn of the 20th century when steam power transitioned to electrification in factories. Back then, many of the industrial incumbents were exclusively focused on steam as their primary source of energy. Meanwhile, there were small, innovative companies who began to offer electricity in new ways. This revolutionary use of electricity was far more flexible and responsive. Machines went from a single steam engine group drive that powered entire factories, to a more efficiently powering individual machines. The move to electricity also saved businesses 20-60% in coal. This new design made it possible to iterate more quickly and made electrified factories more productive. The bottomline, it was not only a cost savings, but it became an enormous competitive advantage.

If machines, platforms and crowds prove to be as disruptive as the authors suggest, we will see a dramatic change in the way business is delivered. Here is my take on the 3 paradigm shifts discussed in the book.

Machine (vs. Mind) - Artificial Intelligence (AI) is quickly becoming an incredibly powerful solution given the exponential progress it has made over the last few years. This is evident as organizations are beginning to embrace Machine Learning (ML) to improve their overall decision-making capabilities. As the authors suggest, you will likely see automated and intelligent machines replace anything that is “dull, dirty, dangerous, or dear” (expensive). This will not only include manual labor, but also highly-paid leadership roles. As machines eventually outpace the accuracy of our minds, we will need to recalibrate the traditional roles and responsibilities in business. For example, you may eventually swap your COO along with an entire swath of middle management for a Chief Creative Officer (CCO). In other words, your CCO will proactively innovate the business model through constant exploration of innovative ideas using short-term iteration, experimentation, and testing versus the conventional long-term planning cycles.

Platform (vs. Product) - We have all witnessed the strain that Uber and AirBnB have placed on the the transportation and hospitality industries, respectively. Unfortunately, many of the current long standing incumbents will see similar threats crop up to disrupt their markets. Generally, we see this shift toward a leaner model, thus leveraging a virtual inventory of assets (cars, apartments, etc.) while eliminating the need for the so-called “middleman”. This is usually accompanied by real-time ratings and dynamic pricing on a national or global scale. While the platform solutions like Uber have already made waves, we can expect to see a second generation of disruption over the next decade. This is when large tech giants like Amazon begin to obliterate companies like Blue Apron. Blue Apron recently lost one-third of it’s value since the company went public last month following news that Amazon filed to trademark a prepared food-kit service.

Crowd (vs. Core) - By definition, crowdsourcing is the practice of obtaining input into a project by enlisting the services of a large number of people, either paid or unpaid, typically via Internet. Consider how this would translate into your business? What might supplant the supporting functions currently required to move your core business? In many cases, this is everything from R&D to all dimensions of marketing. As the authors suggest, these teams could be significantly impacted depending on how your organization chooses to take advantage of  “crowdsourcing” in the future. Companies like GE are now finding success in crowdsourcing new products and services. They are collaborating with online communities to gauge demand along with designing and building new products. As a result, GE has found the process to be faster, cheaper and more closely in line with their customer’s expectations.

So, what does this mean for your business? I think it depends. In some cases, it appears entire industries will be completely upended whereas others will have to adjust and continue to remain nimble. I think the important takeaway here is to understand these paradigms with respect to your business. There is no perfect balance suggested between mind and machine, product and platform, core and crowd, but the world is certainly shifting in favor of the latter in each case.

Nikola Tesla once said, “It is paradoxical, yet true, to say, that the more we know, the more ignorant we become in the absolute sense, for it is only through enlightenment that we become conscious of our limitations. Precisely one of the most gratifying results of intellectual evolution is the continuous opening up of new and greater prospects.”

Some scholars have suggested that we are at the precipitous of a massive revolution. Are you willing to surrender to the “intellectual evolution” described by Tesla? Be the disruptor or be disrupted.