Jump The Curve Archives: 01/2010

The Exponential Banker

I have two young children. As a way of imparting financial wisdom on them at an early age, I asked both of them after they lost their first tooth which they would rather receive from the tooth fairy: $1 per tooth or a penny for their first tooth and then double the amount for each successive tooth. After I informed that all children have 20 baby teeth, they both readily opted for the $20 option.

It was a costly mistake because their twentieth tooth would have been worth $5242.88! Such is the power of exponential growth.

The lesson, which is a familiar one to many in the banking industry, is more relevant than ever because society is poised to enter what I call the “exponential economy.” There are a number of technological forces, including computer semiconductors, Internet bandwidth, data storage capacity, genomics and advances in nanotechnology, which are doubling anywhere from every 6 to 12 months. Moreover, they are expected to continue doubling for at least the next decade.

Another interesting fact about exponential growth is that anything that doubles just ten times is a thousand times bigger than it was at the beginning.

This recognition requires today’s banking executives to become what I call “Exponential Executives.” That is leaders who understand that as impressive as past technological advances have been—the ATM, online banking and mobile banking, etc—they are just the beginning.

Banking interactions will continue to evolve as customers’ physical and virtual worlds become intertwined, and social networks and mobile platforms will transform customers’ banking experiences and expectations. Still other advances will create an environment where a premium is placed on unconventional thinking and risk-taking.

As we enter the exponential economy there are five skills which will help the Exponential Banking Executive navigate through these turbulent and uncharted waters.

#1 Partnering: The first doubling in exponential growth is always from 1 to 2. The same principal is at work for the Exponential Executive as they head out into a future that seems almost unknowable. Yet if one thinks about this idea of “going out into the unknown” it is not much different than what the famed American explorers Lewis and Clark experienced 200 years as they began their exploration of the American West.

Think about it for a moment. How do you prepare for a journey in which you have no idea of what you might encounter; how long you will be gone; or even what skills you will need?

Not surprisingly, the first decision Meriwether Lewis made was to invite William Clark to become his co-leader.

Tomorrow’s banking environment is going to be equally complex and to survive it may be essential to bring on a co-equal who has skills and expertise in areas where you are less strong. This model of co-leadership is one CO-CEO’s John Addison and Rich Williams have applied at Primerica Financial Services for years.

#2 Jump the Curve: In 1996, Reed Hastings wanted to start a new business that sent movie videos through the mail. At the time, his business model didn’t work because VHS cassettes were prone to breaking and too heavy to send through the mail at an economical cost. Hastings, however, understood something his peers didn’t. He knew data storage was doubling every six months and that by 1999 the movie industry was likely to convert all movie rentals to a DVD format. In essence, Hastings looked at where the curve of technology was headed and began planning his move years in advance.

If one applies this same insight to many of today’s accelerating technologies, such as biotechnology, genomics, stem cell research and nanotechnology, it is clear that most demographers’ life expectancy predictions will be well off the mark. Barring a major disaster, I fully expect life expectancies will soon reach 80 and shortly thereafter 90—and, perhaps, even higher. The Exponential Banking Executive’ should be “jumping the curve” and preparing for this contingency today by developing products, services and tools that will serve this growing population.

#3 Embrace Ambiguity. There is the old saying that if something looks like a duck and quacks like a duck then it must be a duck.  The picture below is a duck, correct? Look again. When viewed from a different perspective it is also a rabbit.

The future must be viewed through the same lens of ambiguity. There is no question that the banking industry is in the midst of a severe crisis. But just as the Chinese character for the word “crisis” is comprised of the symbols for “danger” and “opportunity” so too is this present crisis also an opportunity.

The Exponential Executive faces the same reality as his or her peers, the difference is that he or she uses the situation to revisit old assumptions and fundamentally rethink how to do business in order to best serve their customers.

#4 Unlearn: Among the many trends that are doubling perhaps none is quite as astounding as the fact that scientific and technical knowledge is doubling every seven years. In other words, as impressive as everything we know today is, this knowledge will only equal half of what we will know in seven years—and just 25% of what we will know in 14 years!

From this perspective, it makes sense to think of today’s knowledge as the tip of the iceberg. Future knowledge is the equivalent of that portion of the iceberg that is presently underwater. As this new knowledge emerges over the coming years, one of the more difficult realities to accept is that it will make some existing knowledge obsolete. To prosper in the future then the Exponential Banking Executive must understand that unlearning will be just as critical as learning.

For example, as new wireless and virtual realities technologies become more prevalent how many branch offices will really be needed?  And, if people are living significantly longer, are 15 and 30 year mortgages the most appropriate terms? Change is never easy but if one embraces “unlearning” the rationale for change becomes easier to accept.

#5 Believe in Doing the Impossible: Just over one hundred years ago the idea of human flight was dismissed as the pipedream of a small group of fringe scientists and hobbyists. Fifty years the idea of a “test-tube baby” was similarly deemed impossible. And just ten years ago the idea that people working for free could design and write an encyclopedia which was as accurate as the Encyclopedia Britannica but be twice the size (and doubling every year) and available in a 140 different languages would have been dismissed as implausible. Wikipedia, of course, is a reality today.

If the future teaches us anything it is that the impossible has a way of becoming possible. The Exponential Banking Executive understands this reality and by partnering, jumping the curve, embracing ambiguity and unlearning, they are willing to accept that the path into the future will always be murky; but they also know they possess the tools and flexibility to help shape and create their own future.

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The Future’s So Fast It’ll Slow Down

I’m not trying to get deep on you with this title: The Future Is So Fast It’s Slow. Instead, I want to make an important point about the future. It is a fact that technology is accelerating. It is easy, therefore, to jump to the conclusion that everything else will speed up as well. In many cases this it true but not always.

In a counter-intuitive way, the future’s accelerating pace of change can work against itself. How so, you ask? Consider the case of the flat panel television. How many of you postponed a purchase because you were afraid that the television you purchased would be obsolete as soon as you bought it? My guess is that you may have delayed your last laptop computer for the same reason.

The number of items about to experience this effect will soon accelerate. Consider your car purchase. Will you delay buying a new car because a new hybrid vehicle may soon be available or, perhaps, a new higher MPG version is soon expected. The same thing will happen with cellphones, electronic books, and solar cells.

The pace of change is these areas is accelerating so rapidly that it is hard to know when to pull the trigger and buy a specific. As a result, you don’t. This lack of capital in turn retards progress.

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Evolution Requires Unlearning

I am not an evolutionary biologist. I do not play one on television and, even though this is the Internet, I won’t try to pretend I am one. Nevertheless, I have come to the conclusion that unlearning will be an essential skill in the future because I am of the opinion that human evolution is an exponential trend.

Let me put it another way. Until about 200 years ago the average person could expect two constants in his or her life. First, life didn’t change much. If your grandfather was a farmer (or peasant) it was likely that your father was also a farmer or peasant and so were you. Moreover, you all lived life in much the same way and used the same tools and equipment.

The second constant was that your life was short. Assuming you successfully survived the first few years of your life (and this, by the way, was no easy task), you could expect to live until the rip old age of 50.

Under such conditions it was appropriate to put a premium on learning because whatever you learned you could expect to utilize the remainder of your life.

In today’s era of accelerating technological change, however, the equation has been flipped on its head. The shelf life of knowledge is growing ever shorter and we must realize that much of what we will learn will need to be unlearned shortly thereafter.

Society has not yet fully recognized the extent of this shift but it will have profound implications for how we educate ourselves and our children. I’d love to hear your ideas about: 1) Whether you agree with my premise; and 2) How you’d try to help society deal with this change. (One idea I have is that we must teach unlearning beginning in kindergarten.)

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The Future Requires Unlearning
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Not Unmindful of the Future

Yesterday, I had the pleasure of addressing members of the Federal Executive Institute at the Marshall Foundation in Lexington, Virginia. The subject of my presentation was “Leading in an Era of Exponential Change: The Example of General George C. Marshall.” As readers know, I believe Marshall is the epitome of an “exponential executive,” and it is why I wrote an entire book on his extraordinary leadership skills: Soldier, Statesman, Peacemaker: The Leadership Lessons of General George C. Marshall.

After my presentation, I had the pleasure of tagging along with the class as it received a tour of the Washington & Lee Chapel where Robert E. Lee is buried. As I listened to the lecture, I learned that the Lee family (and now the Washington & Lee University) coat of arms bears the Latin motto: Non In Cautus Futuri. It translates to: “Not Unmindful of the Future.”

It is a wonderful phrase and it is a principle I strive everyday, as a professional futurist, to abide by.

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Automobiles’ QWERT-Like Future?

The common “QWERTY” keyboard is the de facto keyboard across the English-speaking world. The QWERTY keyboard is not, though, the most efficient keyboard. That distinction belongs to the Dvorak keyboard upon which a properly-trained typist can reportedly type 20-30% more words per minute.

This fact has been known for decades but, still, few people use the Dvorak system. (Shamefully, even I’m typing this post on a Qwerty keyboard.)

Why? The short answer is because unless a technology can deliver an over-riding reason for change most people won’t change.

I ask you to keep this little fact in mind when other futurists predict the quick demise of the internal combustion engine. Now, I’m no fan of the combustion engine and I understand how advances in battery technology could lead a transition to all-electric cars. But I’m also aware that advances in synthetic biology may create a cleaner, cheaper and more environmentally-friendly biofuel. To this end, even if battery technology is 20-30% better it may not be accepted by the public for the same reason the Qwerty keyboard is still the most used keyboard: People resist change and if they can still “fill-er up” with fuel they are likely to do so.

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The Hospital of the Future

For the past two days I have been in California working with a well-known construction company and architectural firm designing the hospital of the future. Due to the proprietary nature of project, I can’t go into specifics with this post but I always begin such projects from the premise: What must we unlearn? 

For example, perhaps, we should unlearn the idea of who the customer is. Every hospital claims it wants to “serve the community.” If they are serious about this idea than they must also focus on non-customers. in other words, a true community hospital needs to continuously look for ways to “push” preventative information medicine out into the broader community so that its citizens never need to visit the hospital in the first place.

Hospitals must also unlearn the idea of the doctor-patient relationship. Today, patients and their social networking often know just as much—if not a lot more—about their disease than the doctor. The hospital of the future must acknowledge this reality and be designed in such a way that information can flow freely between all parties.

Another thing hospitals must unlearn is the waiting room. One strategy to think differently about the hospital of the future is to focus on the “exit” room. What information does the patient need so that he or she doesn’t need to return to the hospital?

I have a lot more ideas but I’d love to hear your thoughts on this subject.

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Unlearning & the Health Care Debate

Unlearn the Doctor/Patient Realtionship

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The Future of Education is Short

A college education is typically four years. Is there any reason why this length must remain the norm? The answer is a resounding “no.” Last year, I suggested the future of college may be $99 a month.

A few innovators are now offering college courses using a new, “all you can consume” model. In other words, instead of paying for courses individually (and by the credit hour), some on-line institutions are allowing students to take as many courses as they want within a specified time frame. This model allows students to finish college much sooner and on their own timeframe—rather than some artificial schedule.

There is an another reason why I believe this model is closer to what the future of education will look like. This past weekend the New York Times ran an interesting article entitled The Children of Cyberspace: Old Fogies by Their 20s.

The gist of the article is that technology is now moving so fast that it is creating “mini-generations.” For example, a college student who grew up in the FaceBook era now looks hopelessly outdated to her Twittering high school brother. And, not too soon, the brother will look equally clueless to his 7th grade sibling who is sure to adopt Kindle or whatever the next, new innovation may be.

One huge implication of technology acceleration is that the shelf life of some (but not all) knowledge is getting shorter and shorter. Why then spend a semester—or worse four years—learning something which will soon be obsolete?

Many courses will, by necessity, need to become shorter and high schools, colleges and universities must acknowledge this reality by offering courses more in tune with the future. This means shorter—but likely more intense—courses.

Rhetoric aside, education will also become a truly life-long endeavor; and unlearning will become just as critical as learning in the future.

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The Future of Manufacturing

In the 1991 hit movie, Pretty Woman, Richard Gere was shown using a huge, bulky cellphone. At the time, it was state-of-the-art and cost about $5000. Today, cellphones are everywhere. I encourage you to watch the video on this crude $950 3-D printer and think of it as Richard Gere’s cellphone in 1991. The technology is only going to get better, faster and cheaper and, by the end of the decade, I expect many people to own 3-D printers.

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Jack Uldrich’s 10 Predictions for the Decade of the “Turbulent Teen’s”

”Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.” It was the ancient Chinese philosopher Lao Tzu who uttered these wise words. As a professional futurist, I always keep this quote in the back of my mind and remind my audiences that I am not in the business of making predictions. Instead, I offer my clients a forecast which includes a broad range of future possibilities.

Nevertheless, I understand the appeal of predictions and do feel they can play a limited role in helping businesses, corporations, NGOs, and governments more realistically think about the future.

Therefore, much as I did last month with my 20 Predictions for 2010, I would now like to offer my humble predictions for how the following decade may unfold—all the time remembering that the future will most likely be shaped by those ”Black Swans” which none of us see coming.

Here then are some of my predictions to get your “future juices” flowing:

2010: The term “augmented reality” will be the year’s big buzzword. Augmented reality apps such as Yelp Monocle and Wikitude World Browser will continue to grow, but the year’s biggest hit will be the yet-to-be-released TAT Augmented ID—which uses face-recognition software to display information about the person being viewed. By the end of the decade, health care professionals will be able to display a patient’s entire medical history on a flexible electronic device which they can fold up and carry with them at all times.

2011: “Vooks”—a combination between an electronic book and a video—will become increasingly popular. By the end of the decade, a number of schools will be using the devices to provide students a deeper, more meaningful learning experience.

2012: College graduates will begin identify a variety of new career possibilities. Some of the more popular future jobs include genetic data counselors; privacy data consultants; 3-D gaming software enginners; rapid prototype manufacturers and climate geoengineers. By the middle of the decade, frustrated by society’s inability and unwillingness to seriously change their behavior in the face of climate change, Al Gore will reverse his position and become an advocate of limited climate geoengineering—the idea of using technology on a grand scale to modify the natural environment.

2013: A truce in the “War on Cancer” will be called as advances in gene therapy and nanomedicine begin addressing cancer at the molecular level. Cancer will still exist but the new paradigm will be premised on treating cancer on an ongoing basis. (In this way, it will be similar to how we now treat diabetes.) By the end of the decade, chemotherapy will be viewed as a crude and blunt instrument.

2014: A combination of radical advances in solar and desalination technology will afford an increasing number of farmers—especially those near coastal areas—access to cheap and reliable amounts of fresh water. By the end of the decade, however, climate scientists will become increasingly concerned that the amount of water being diverted from the world’s ocean is having a harmful effect on a number of ocean creatures. On a different front, advances in the field of synthetic biology will now be regularly supplying airlines with jet fuel produced from biomass.

2015: Due to a plethora of medical advances in gene therapy, biotechnology, nanomedicine, stem cell research and regenerative medicine, life expectancy will continue to grow faster than most demographers has estimated. Congress is finally forced to accept this reality and indexes Social Security and Medicaid benefits to the annual upward adjustments in life expectancy. AARP members complain loudly and use the latest social media tools to bolster their cause but younger more tech-savvy voters use new and even more effective data mining tools to out-organizer the “geezer geeks.”

2016: In the face of the growing environmental costs of producing, processing, shipping, packaging and storing meat, the FDA approves lab-grown pork for the commercial marketplace. PETA applauds the move but Greenpeace vows to fight the growing trend and labels lab-grown meat as “Frankenfood II.” By this time in the decade, a major biological attack will have occurred somewhere in the developed world and a number of democratic governments will have responded by limiting personal freedoms in exchange for greater security. (Advances in predictive algorithms; data mining; and face and voice recognition; cheap camera; and sensor technology will make security technology very effective.)

2017: Time Magazine will be in serious discussions about ending the print version of its magazine and will name “The Robot” as its 2017 “Person of the Year.” Space flight—at least into the outer atmosphere—will become affordable for upper middle class individuals.

2018: Diamonds will no longer be a “girl’s best friend.” The natural diamond market will collapse in the face of the superiority of synthetic diamonds. On a different note, startling progress in the field of tissue regeneration will have eliminated organ shortages and made organ donations as irrelevant as radiation therapy.

2019: The decade will be come to be referred to as “the turbulent teens” due to the growing maturity of such countries as India and Brazil; the wide-spread economic disruption wrought by technological advancement; and a renewed sense of optimism due to the fact that so many things once deemed “impossible” are now coming to fruition.

Jack Uldrich is an author, futurist, keynote speaker and host of jumpthecurve.net. He is the author of seven books, including Jump the Curve and The Next Big Thing is Really Small: How Nanotechnology Will Change the Future of Your Business. He is also a frequent speaker on future technology and future trends, nanotechnology, innovation, change management and executive leadership to a variety of businesses, industries and non-profit organizations and trade associations. He can be contacted at 612.267.1212 or jack@nanoveritas.com.

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