Coding the economy to cut the high price of low cost

Photo by Ray Hennessey on Unsplash

The allocation of resources - and the cost of optimising that allocation - has always been humanity's most profound challenge. Artificial Intelligence may offer our best solution - but only if we are prepared to think globally.

Capital and the market model it sustains has been held up as our best bet for resource allocation for centutres. Yet capitalism and its governance are not necessary states by any means. They are emergent properties of the complex adaptive system we describe as the economy.

One transaction allocating value does not capitalism make. Multiple ones at scale can. Just as a molecule of water is not a wave, let alone a tidal force. These are emergent properties of complex adaptive systems.

The interactions within the system are what creates those emerging properties. Change those interactions and the properties change.

The best modifier we have had to date has been Government intervention - taxes, laws, welfare etc. But complex aqdaptive systems are notoriously difficult to tinker with. Think of the butterfly effect as applied to weather (another complex adaptive system).

So a Trump here or a Brexit there is going to have some impacts, but predicting exactly who, where and what feels the chill wind is a somewhat more exacting science than knowing that change will come.

As our economy has become more connected (and decentralised) it is becoming more anti-fragile. Make no mistake the economy will keep on functioning no matter what governments do. The question is can it be controlled somehow to ensure the emergent properties are desirable for humanity?

As we head towards quantum computing and ever more intelligent automation the point looms at which decisions to allocate resource will patently be better handled by machines.

Our machines will be better able to calculate the global economic costs of each transaction. They will factor for the environment as much as for human need. If we code that in.

But this is going to be a greater race for power than military applications of AI. Those who choose not to take part will be at significant compertitive disadvantage to rivals.

So the pressures to allocate to meet immediate human gratification will be huge. Only through global agreement on total costs will we give our children a chance.

The strategic importance of managed innovation in digital transformation

A couple of thoughts in visual form on the strategic importance of managed innovation in digital transformation - and the behaviours required of the people involved:

First - the strategic importance:

Second - the behaviours

Enabling achievement vs hitting your KPIs

Photo by Jonas Jacobsson on Unsplash

GCSE exam results filled the UK media today, telling its once-a-year story of joy and heartbreak. The arguments over the KPIs have been more intense this year amid changes in the way exam results are calculated.
Which prompted
me to return to a regular question when faced with how to measure something.
I asked a teenager what she thought education was for?
'To help you pass exams,' she said.
But it's not, is it?
Education is a lifelong thing. We acquire new skills and capabilities to be able to achieve things. Education is to enable us to achieve the things we seek to achieve.
The exam result is not the thing we are seeking to achieve.
The same is true of so much poor wisdom applied to the selection of our business KPIs. Too often they provide a distraction from the thing we are seeking to achieve and become an end in themselves.
Next time you are tasked with designing or setting kpis, remember how exams can so easily fail the goals of education.

Crushed by scale

Photo by Mikito Tateisi on Unsplash

What if your process is simply scaling up doing the wrong thing?
What if your improved technology enables you to do that wrong thing even faster?

We often talk about the economies large organisations gain through scaling. But doing more of the wrong thing, that's the diseconomy of scale - and the crippling drag on the value of change.
So while we marvel at the new things, we must never be distracted from the need for new ways.


Digital Transformation is little more than a new thing to marvel at (an expensive tech upgrade) - unless it is accompanied by a shift to insight-led, value focused innovation as the organisation’s default way of working.
And while ideas are great, value is better. And continuous value creation is best.
To get to best requires tested frameworks, the right expertise, accelerators and approaches,. And they must be delivered in a repeatable, human-centred and transferable way.

And only once you are proving value... then you scale.

The Digital Customer exposes the need for value in all interactions

We already have digital versions of ourselves populating our increasingly digital world: Your Linkedin, Facebook and Twitter profiles, your Amazon and Google footprints are all examples.
For the most part they are not yet autonomous. But it cannot be long before the 'MeBot' - an autonomous and intelligent you - becomes a ubiquitous part of our daily interaction with people, things and data.
All of which strongly suggests that brands and organisations must start developing strategies that place the digital customer at their heart.
Let me be clear, that digital version of you will always be informed by and learning from the real you. But increasingly it will be the digital rather than analogue version of you who will be making the transactions (tilting, as these thing are, to online more heavily by the day).
And if Digital You has got the spends - Digital You is going to be the target.
So what does advertising/targeting/relationship-building/comms/PR/you-name-it look like when it is aimed at our MeBot?
Well - I suspect MeBot's will rapidly learn which lies to ignore, which content sources to trust, which deals are for-real. They may even be less swayed by the Herd mentality humans find it so hard to resist (think of the impact on the Stock Markets...).
This is likely to starkly expose some of the realities and truths of relationships of trust - such as...

1. Customers are not inhabitants of your omnichannels waiting to be managed from one to the next. They live in a 4D world with limitless touchpoints. The analogue digital combination will evidence that by the truck-load. Map that!
2. Customers are not waiting to be engaged, made your friend, or have anything else 'done' to them. They need a reason to interact with you... which leads us to point 3.
3. Customers are not loyal. Forget loyalty - focus on proof of value. Unless you are offering a good enough value proposition your wheels will just keep on spinning.